Brazilian authorities are taking legal action against Chinese electric vehicle (EV) leader BYD and two associated contractors, alleging severe labor violations at a construction site in Bahia state. According to Brazil’s Public Labour Prosecutor's Office (MPT), the companies are being sued for a combined 257 million reais (approximately $45.5 million USD or £33.7 million GBP) in damages related to human trafficking and “conditions analogous to slavery.”

The MPT launched an investigation following an anonymous tip-off, which led to the rescue of 220 Chinese workers. Officials say these workers were housed in overcrowded and unsanitary accommodations, including beds without mattresses and a single toilet reportedly shared by 31 individuals. The labor conditions prompted authorities to halt construction of the EV plant late last year.

Further allegations include the confiscation of workers' passports, excessively long work hours without adequate rest, and illegal clauses in their employment contracts. Prosecutors also claim that up to 70% of workers' salaries were withheld and that they faced steep financial penalties for attempting to leave their jobs.

Under Brazilian law, "slave-like" conditions encompass practices such as debt bondage, degrading work environments, and violations of human dignity.

The facility, located in Camacari in northeastern Brazil, was slated to begin operations in March 2025. It would have been BYD's first electric vehicle manufacturing plant outside of Asia.

BYD, which stands for Build Your Dreams, has rapidly expanded its global presence and became the top-selling EV brand in Europe in April, surpassing Tesla, according to data from industry analyst Jato Dynamics. The company has been investing heavily in Brazil, its largest overseas market, having opened a factory in São Paulo in 2015 to produce electric bus chassis.

While BYD has yet to comment on the latest allegations, the company previously stated it maintains a "zero tolerance" policy for violations of labor laws and human rights.