Brazilian authorities have stopped construction of a factory for Chinese EV giant BYD due to worker mistreatment. More than 160 workers were rescued from harsh conditions in Bahia, local prosecutors confirmed.

The Public Labour Prosecutor’s Office (MPT) reported workers lived in degrading conditions. Their passports and salaries were allegedly withheld by a building company.

BYD responded by severing ties with the implicated firm. The company emphasized its commitment to following Brazilian laws.

Alarming Conditions Found at Worker Lodgings

The workers, employed by Jinjiang Construction Brazil, stayed in four facilities in Camaçari city. At one location, workers slept on bare beds without mattresses. Bathrooms were shared among 31 workers, forcing early morning routines.

Prosecutors described the accommodations as highly degrading. Brazilian law defines “slavery-like conditions” as debt bondage or work that violates human dignity. The MPT stated wages were withheld, and workers faced high costs to end their contracts.

BYD moved affected workers to hotels and reviewed conditions for subcontracted employees. Despite requests, the construction firm reportedly failed to improve the situation.

BYD’s Expanding Presence in Brazil

BYD, one of the world’s largest EV manufacturers, has been growing in Brazil. It first opened a factory in São Paulo in 2015 for electric bus chassis. Last year, the company announced a $484 million investment to build its first EV manufacturing plant outside Asia. The halted factory was set to open by March 2025.

BYD recently surpassed Tesla in EV sales, selling more vehicles in late 2023. The company’s growth in Brazil highlights its importance as BYD’s largest overseas market.

However, challenges loom as EV markets face scrutiny. In China, government subsidies boost sales, but international backlash over these policies has grown. The US and EU have introduced tariffs on Chinese EVs, with more restrictions expected soon.