Tesla's Chinese Rival BYD Sued For $45 Million Over Alleged Human Trafficking, Slave-Like Conditions At Brazil Factory Site

Brazilian labor prosecutors filed a lawsuit on Tuesday against Tesla Inc. (NASDAQ:TSLA) rival BYD Co Ltd (OTC:BYDDY), seeking $45 million in damages for alleged human trafficking and slavery-like working conditions at the Chinese automaker’s factory construction site in Bahia state.

What Happened: The lawsuit demands 257 million reais ($45 million) in moral damages from BYD and contractors JinJiang and Tecmonta, plus individual worker compensation and 50,000 reais ($8,862) in fines per labor violation multiplied by affected workers, according to a statement from the labor prosecutors’ office, reported Reuters.

Deputy labor prosecutor Fabio Leal said 220 Chinese workers were brought to Brazil illegally under false promises and subjected to slavery-like conditions. The workers, who have since returned to China, would receive compensation there, with Brazilian companies providing payment proof. Settlement talks that began in December failed to reach an agreement.

BYD responded that it “is committed to upholding human rights and respects Brazilian and international labor protections” and will address the lawsuit through court documents. The company has been cooperating with prosecutors throughout the investigation.

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Why It Matters: Brazilian authorities in December halted factory construction after rescuing 163 workers living in conditions analogous to slavery, according to the Labor Prosecutor’s Office. Workers faced forced labor terms where employment termination within six months meant leaving Brazil without pay due to the deducted airfare and costs.

BYD previously cut ties with contractor Jinjiang Group after authorities flagged the issues. Jinjiang denied allegations, claiming workers felt “insulted” by slavery characterizations and accused “foreign forces” of attempting to smear Chinese brands. The Brazilian government in January suspended temporary visa issuance to BYD, with approximately 500 Chinese workers initially brought in for factory construction.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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