MercoPress. South Atlantic News Agency

BYD EV manufacturer clashes and apologizes to one of its main markets due to slavery-like conditions

The factory is a symbol of China's growing influence in Brazil's close relationship

The Chinese BYD electric car factory construction in northern Brazil has turned out into a dispute between Chinese investors and Brazilian authorities who accused the Chinese contractor of having Brazilian labor working in slavery-like conditions that allegedly entered the country with temporary labor visas.

Brazilian labor officials claimed Chinese workers had been brought to Brazil irregularly in “slavery-like” conditions at the BYD factory construction site in the northeastern state of Bahia. The workers were employed by contractor Jinjiang Group, which obviously has denied any wrongdoing.

The Brazilian foreign ministry also said the Chinese workers were victims of “human trafficking”, since they entered the country on temporary work visas.

The factory is a symbol of China's growing influence in Brazil’s close relationship between both countries. BYD has invested US$620 million to set up the Bahia factory complex alone. Brazil is the biggest overseas market for BYD.

The Chinese EV maker has said it plans to start production in Brazil early next year with an initial annual output of 150,000 cars.

Brazil's Ministry of Justice said in a separate statement that if irregularities found by prosecutors in the BYD factory are confirmed, it would revoke the residence permits it had issued to the Chinese workers.

The Ministry of Justice had already sent a request to the Ministry of Foreign Affairs to suspend BYD temporary visa issuance on Dec. 20, three days before the labor authorities' findings were made public.

In a social media post by a BYD spokesperson, Jinjiang Group rejected the Brazilian authorities' accusations about the work conditions at the Bahia site. The contractor said the portrayal of the workers as “enslaved” was inaccurate and that there had been translation misunderstandings.

Nevertheless BYD and Jinjiang Group have agreed to assist and house the Chinese workers in hotels until a deal to end their contracts is reached, the Brazilian Labor Prosecutor's Office said in a statement. The investigation into working conditions of local Brazilian labor continues.

BYD, short for Build Your Dreams, is one of the world's largest EV makers. It sold more EVs than Elon’s Musk Tesla in the last three months of 2023, as the two battled for top spot in the sector. The company has also been expanding its foothold in Brazil, which is its largest overseas market by a wide margin.

EV sales in China have been boosted by government subsidies, which encourage consumers to trade their petrol-powered cars for EVs or hybrids. But there is a growing backlash abroad against what some see as the Chinese government's unfair support for domestic car makers.