BYD: Controversial plant opened in Brazil, plans in Mexico on hold

Last week, the Chinese electric car manufacturer BYD (Build Your Dreams) opened its new plant in Brazil. This was reported by the Brazilian media. It is the first plant of a Chinese car manufacturer in the country and BYD's first on the American continent. The factory in Camaçari in the north-eastern state of Bahia, which previously housed a Ford plant, will produce the Song Plus SUV, a plug-in hybrid, and the Dolphin Mini electric car.

The plans for the BYD plant in Brazil, the company's first outside Asia to build purely electric cars, were announced at the beginning of 2024. At the time, Brazil's President Luiz Inácio Lula da Silva spoke of an investment of around 564 million euros.

At the end of December last year, however, the project hit the headlines due to allegations of labor violations and even suspicions of human trafficking. The scandal delayed the original schedule. After initial investigations, the Brazilian authorities spoke of "slave-like conditions" for 163 Chinese workers. Later, a further 57 workers were found to be in a similarly precarious situation. At the end of May, the Brazilian Labor Prosecutor's Office (MPT) then filed a civil lawsuit against BYD for "international human trafficking" and "working conditions comparable to slavery" during the construction of the BYD plant and demanded the payment of millions in damages.

Not everything else is running smoothly either. BYD has announced that it not only wants to build cars in Bahia, but also batteries and green hydrogen cells. A factory for electric buses and trucks, a technology center and a university to train specialists are also to be built. However, only around 700 of the promised 20,000 jobs have been created so far. The vehicles in Brazil will also initially only be assembled from CKD (Complete Knock Down) kits. BYD then plans to start full production in Camaçari in July 2026. By then, 150,000 vehicles are expected to roll off the production line there every year.

Trump puts the brakes on BYD in Mexico

At the same time, the Chinese company has put its plans for a plant in Mexico on hold. This was reported by the Mexican business newspaper El Financiero, among others. Geopolitical tensions and uncertainties due to US President Donald Trump's trade policy are cited as the reason. "Geopolitical issues are having a major impact on the automotive industry. Everyone is now rethinking their strategies in other countries. We want to wait until we have more clarity before we make a decision," said BYD top manager Stella Li in an interview on the sidelines of the opening of the BYD factory in Brazil.

BYD had been considering three sites in Mexico for its new plant, which would employ 10,000 people, before it stopped actively searching last year to await the results of the US presidential election. This is according to a report by US news agency Bloomberg. Moreover, the Chinese Ministry of Commerce delayed approval of the project due to concerns that BYD's technology could be accessible to the United States, the Financial Times reported in March. The situation became even more complicated after Trump announced comprehensive tariffs on numerous countries, including specific tariffs on vehicle imports.

Despite these challenges, BYD is sticking to its intention to expand its production capacity in the Americas but, according to Li, has no clear timetable for when it will make a final decision given the uncertain global trade environment.

(akn)