BYD draws EU scrutiny over labor abuse allegations at Hungary factory

Electric car giant BYD has become the first Chinese company to be brought up in the European Parliament over allegations of worker abuse in Hungary, CNBC has learned, following a watchdog’s investigation into working conditions in the region.

Contractors hired to build BYD’s factory in Hungary allegedly employed thousands of employees seven days a week, with shifts lasting more than 12 hours a day. report It was published by New York-based watchdog China Labor Watch (CLW) on April 14. The group said it had interviewed 50 workers and visited the factory site three times since October 2025.

China Labor Watch, a US-based non-profit organization that has been monitoring worker conditions since its founding in 2000, shared the report’s findings with EU government representatives. Earlier this month three members of the European Parliament officially He asked the European Commission about alleged labor abuses in Hungary.

China Labor Watch’s allegations mark the first time allegations of labor abuses in the European Union linked to a Chinese-owned automotive business have been brought to the attention of the European Commission, according to checks by CNBC.

one in february The worker was reported dead In the field during crane operation. CLW founder Qiang Li told CNBC, citing conversations with workers, that there were more deaths in the region.

He added that, based on interviews with workers, wider medical support was inadequate as individuals were not always employed on work visas with relevant health insurance.

Since February 1, emergency medical teams have been called to the factory site 12 times, one of which resulted in a death, Hungary’s National Ambulance Service told CNBC on Thursday.

The latest claims come as BYD is set to become an automotive powerhouse, surpassing Tesla to become the world’s largest electric car maker by 2025. BYD is among a group of Chinese companies expanding abroad and aiming to sell more than a million cars outside China this year as sales in its home market decline.

One of the contractors mentioned in the report, AIM Construction Hungary, is a subsidiary of Jinjiang Construction Group; The same company is linked to the 2024 project. scandal -most BYD’s factory In Brazil this national labor authorities After investigations, he said that the circumstances were “similar to slavery”

BYD claimed in December 2024 that: Stopped working with Jinjiang Construction’s Brazilian subsidiary in the wake of the scandal. However, allegations in the CLW report indicate that BYD hired another subsidiary of the same Jinjiang group to build the factory in Hungary. The report stated that CLW examined a sample employment contract for work at BYD’s Hungary plant, which included the option of being sent to Brazil and Türkiye, where BYD is also based. build a factory.

AIM Construction Hungary was previously known as China Jinjiang Construction Hungary. company records From Hungarian Ministry of Justice, accessed at: authorized data provider.

BYD and Jinjiang entities did not respond to CNBC’s requests for comment. Officials in the EU also did not respond.

The facility in Szeged, southern Hungary, is one of the automaker’s five BYD facilities in Hungary. Established European headquarters about a year ago during President Wang Chuanfu’s visit.

The EU increased customs duties on Chinese-made electric cars in 2024 in a bid to localize production. But Chinese-made vehicles still climbed to the record 9.3% of new cars sold on the block in December, according to Rhodium Group.

BYD is rapidly increasing its market share. New BYD cars registered in the EU more than twice According to the Association of European Automobile Manufacturers, it surpassed Tesla in the first two months of the year and gained 1.8% of the market, reaching 29,291.

According to European Commission data, BYD’s Seal U model ranked third after Renault and Skoda models in January registrations. More than two-thirds of new passenger cars sold in Europe in January were electric.

Hungary has received the bulk of China’s increasing automotive investment in Europe in the last three years. Rhodium Group data.

BYD’s Szeged factory is planned to be established Produces 300,000 cars per year will operate at full capacity, but the timeline for achieving that goal is uncertain.

According to CLW, as construction of the factory progressed, the mostly Chinese workers were allowed to rest only when inclement weather stopped work.

Executives “wanted to start car production in January [2026]”That’s why they were rushing the project’s timeline, not letting the workers go,” Li said in his Mandarin speech translated by CNBC.

Szeged plant produces BYD’s Dolphin Surf model, according to a company statement citing BYD Executive Vice President Stella Li. The local press wrote in January: trial production started.

CLW’s Li said contractors use a range of financial tools to keep workers on site. Some were promised free flights home if they worked for more than six months; Others had their salaries stopped until their contracts were fulfilled or incurred various expenses, such as recruitment fees, before they even arrived on site, according to the report.

The report said employees were only required to tell labor inspectors that they worked “eight hours a day, five days a week, and one hour overtime.” CLW claimed direct violation of actual working hours Hungarian Labor Code – limiting working hours to eight per day and not more than 48 hours per week – and that its conditions are similar to the definition of the International Labor Organization forced labor.

When CNBC contacted Hungary’s National General Directorate for Aliens Police about the allegations, the government department said it had “taken the necessary measures, within its authority, to conduct an investigation of the matters described in the statement.” [CLW’s] applications.”

Luiz Felipe Brandao de Mello, head of Brazil’s agency responsible for enforcing national labor standards, has been dismissed from his position, according to a news release. official government gazette. Reuters, citing two sources familiar with the matter, reported: de Mello lost his position Due to the decision to add BYD to the blacklist, which restricts its access to loans.

Brazil’s labor ministry had added BYD to the list days ago; however, the Brazilian court reversed this decision pending the final decision.

Brazil’s national union of labor inspectors did not respond to CNBC’s requests for comment.