Brazilian authorities have halted the construction of a factory for Chinese electric vehicle (EV) giant BYD, citing "slavery-like" conditions for workers. Over 160 employees were rescued from deplorable living conditions in the northeastern state of Bahia, according to Brazil's Public Labour Prosecutor's Office (MPT). The workers, employed by Jinjiang Construction Brazil, were allegedly subjected to harsh environments, with their passports and wages withheld by the construction firm.

BYD, in response, stated that it had severed ties with the involved company and remained dedicated to adhering to Brazilian laws. The factory, which was set to be BYD's first EV plant outside of Asia, was slated to open by March 2025. The workers had been housed in four facilities in Camaçari city, one of which reportedly had beds without mattresses and shared bathrooms for 31 people, forcing workers to wake up early to prepare for their shifts.

The MPT condemned the situation as "slavery-like conditions" under Brazilian law, including debt bondage and other forms of degrading work. The conditions also amounted to "forced labor," as workers faced wage withholding and exorbitant costs for contract termination. BYD has since moved the workers to hotels and conducted a thorough review of subcontracted labor conditions, urging the construction company to improve the living and working arrangements.

BYD, which outpaced Tesla in EV sales during the last quarter of 2023, is expanding rapidly in Brazil, its largest foreign market. In 2015, the company opened a factory in São Paulo to produce electric bus chassis, and it plans to invest 3 billion reais ($484.2 million) to build an EV manufacturing plant in the country. Despite success in markets like China, where government subsidies have boosted EV sales, BYD faces growing scrutiny internationally, with major markets like the US and EU imposing tariffs on Chinese-made electric vehicles.