Canada’s auto manufacturing lobby has seized on fresh forced labor allegations against BYD to renew its push against the Chinese automaker’s entry into the country.
Days after Brazilian authorities added the company to a government blacklist over “slavery-like” labor conditions, an upcoming report by the New York-based China Labor Watch (CLW) has found similar situations in its Hungarian plant.
Canadian Vehicle Manufacturers’ Association (CVMA) President Brian Kingston — whose group represents automakers such as Ford, General Motors and Stellantis — has called the report “deeply concerning.”
Speaking with the local media outlet CBC on Wednesday, Kingston said that “Canada’s auto industry can compete and win, but the playing field must be level.”
The reaction comes as BYD prepares its final steps toward entering the Canadian market — following the January deal that lowered the entry tariff of Chinese EVs to 6.1% for an annual quota of 49,000 vehicles.
BYD‘s Executive VP Stella Li told Bloomberg last month that a joint venture structure “would not work” for the company in Canada, while confirming preparations for a market entry.
The company will insist on full ownership of any Canadian facility — a position that contradicts Ottawa’s push for Chinese automakers to partner with local manufacturers as part of its auto industry strategy.
CMVA on China
Kingston said the CLW findings reinforce the case against Chinese automaker entry into Canada.
When the Beijing-Ottawa deal was announced, the CVMA issued a joint statement with the American Automotive Policy Council warning that the move “has the potential to undermine Canada’s auto sector and presents risks to the future of the integrated North American auto supply chain.”
He backed the Conservative Party’s auto pact, which pledged to reestablish free trade between the US and Canada and proposed eliminating the China-Canada EV deal.
Kingston argued that the proposal recognized that North American integration, and not diversification toward China, is the foundation of Canada’s auto industry.
The pact was later rejected in the House of Commons.
Automotive Parts Manufacturers’ Association president Flavio Volpe also weighed in.
“Nobody asks themselves why the cars were so cheap,” Volpe told CBC. “It’s because when you decide to choose affordability to serve your finite resources at the expense of society’s values of fairness, somebody else pays the bill.”
He added that “increasingly, in advanced Chinese manufactured goods, they’re not just exporting the product,” but they are also “exporting their domestic business practices and hiding behind impressive investment numbers in the hopes that we look away.”
Labor Abuse Accusations
The forced labor allegations have landed in the middle of a political row in Ottawa.
Prime Minister Mark Carney was repeatedly questioned at a Toronto news conference late last month over comments by Liberal Party MP Michael Ma during a House of Commons committee.
Ma’s comments appeared “dismissive of the serious issue of forced labour,” as the MP himself later admitted.
“Canada has the most rigorous set of engagements on the issue,” Carney said, defending Ottawa’s efforts to keep products made with forced labor out of Canadian supply chains.
The hearing also featured testimony from Canadian scholar Margaret McCuaig-Johnston, who argued that forced labor is used in the production of Chinese EV components and that Canada should not import Chinese EVs on those grounds.
China’s embassy in Ottawa pushed back forcefully on March 28, dismissing her testimony in a statement posted to X.
“The blatant lie spread by a handful of anti-China individuals about the so-called ‘forced labor’ in China aims to achieve nothing but ‘forced unemployment,'” the embassy said.
It accused critics of seeking to “deprive the Chinese people of their right to pursue a happy life through hard work, disrupt the normal production and operation of Chinese enterprises, and suppress China’s development.”
The embassy said the Chinese government “has always adhered to the ‘people-centered’ philosophy” and described job creation as its “overriding priority.”
It framed Canada-China EV cooperation as “intrinsically mutually beneficial and win-win,” adding that such cooperation “is very much welcomed by the majority of the Canadian public.”
“No matter how many times repeated, a lie is always a lie,” the statement concluded. “Using the so-called ‘forced labor’ as a pretext to smear and attack China will never be accepted. And the anti-China forces’ ill-intentioned political manipulation of the so-called ‘forced labor’ is doomed to fail.”
Hungary Allegations
CLW opened its investigation last year following a complaint from one of the thousands of Chinese migrant workers brought to Hungary to build BYD‘s first European passenger car plant in Szeged.
The group provided an advance copy of its findings to CBC, with full publication expected later this month.
China Labor Watch interviewed 50 workers, most of them construction and installation laborers recruited through subcontractors.
The report describes potential violations of Hungarian labor and migration law, including seven-day workweeks with no rest days, shifts of up to 12–14 hours with a single short meal break, and no paid overtime.
Workers were told to lie to inspectors about their hours.
Wage payments were allegedly delayed by up to three months, with final payments withheld until workers returned to China.
At the same time, the contractors implemented recruitment fees — functioning as debt bondage and trapping low-income workers in poor conditions.
Chinese workers entering Hungary for BYD‘s plant construction were arriving on business visas rather than work permits — which left them without access to healthcare for workplace injuries.
“Chinese workers who are being brought in to work on these sites are being employed in quite horrible conditions,” CLW project officer Elaine Lu told CBC.
Lu said tiered subcontracting blurred legal responsibility, allowing BYD to deflect blame onto intermediaries.
She added that local Hungarian media began reporting on safety concerns at the site after the death of a Chinese worker in February.
Brazil
In December 2024, Brazilian labor authorities rescued 163 Chinese workers hired by contractor Jinjiang Group to build BYD‘s plant in Camaçari, Bahia.
The initial investigation by the Brazilian Labor Prosecutor’s Office accused subcontractors of imposing 12-hour shifts seven days a week.
The report also cited allegations of physical abuse by supervisors, insufficient access to safe drinking water, inadequate protective gear, and substandard living conditions.
According to the lawsuit — and similarly to the reported scenario in Hungary — workers had 70% of their wages withheld and had to pay a security deposit they would forfeit if they ended the contract early.
In that case, they were also required to repay the company for the cost of their trip to Brazil and would not be granted a return ticket home.
A raid by labor inspectors found dozens of workers living crammed in lodgings without mattresses and sharing a single bathroom, in what inspectors described as “degrading conditions.”
At the time, BYD condemned the incidents and said it had removed and barred those involved from the site, instructing its subcontractors to take urgent corrective measures.
It also confirmed that affected workers had received support and remained employed at the site.
The 2024 scandal triggered international outrage and delayed the plant’s construction by several months.
European Factories
The Szeged plant is a roughly €4 billion investment designed to eventually supply the European market with up to 300,000 vehicles per year.
BYD began trial production at the site in late January after missing its original end-of-2025 target.
Stella Li has said mass production will start in the second quarter of 2026, with construction wrapping by year-end.
BYD‘s second European plant, a $1 billion facility in Manisa, Turkey, was originally pitched as a faster, cheaper alternative to Szeged.
Reuters reported last year that the company was prioritizing Turkey on labor cost grounds, though Hungarian officials and BYD itself publicly rejected the claim at the time.
That narrative has since unraveled.
As of February, BYD had yet to break ground in Manisa, 18 months after signing the deal with President Recep Tayyip Erdoğan.
The delay prompted a parliamentary inquiry from Turkey’s opposition CHP party over the status of the $1 billion investment and the tax exemptions granted to the company.
A few weeks after, Turkish Industry Minister Mehmet Fatih Kacır acknowledged the project had slipped but insisted it remained under active supervision.
He warned that Turkey’s incentive framework includes “clear sanctions for investors who fail to complete projects as planned” — language he said applied to BYD specifically.
BYD itself has yet to publicly comment, and no groundbreaking ceremony has been held.
The company has not provided any justification for the delay in construction of both factories.
Vehicles built in Turkey — and the ones in Hungary — would be exempt from the EU’s 17% countervailing duty on BYD imports thanks to Ankara’s customs union with the bloc.
BYD Labor Costs
Western chief executives have repeatedly cited labor cost advantages of Chinese automakers as a structural barrier to competition.
Former Lucid CEO Peter Rawlinson and the current interim CEO Marc Winterhoff, Rivian founder RJ Scaringe and Ford chief executive Jim Farley have all publicly pointed to Chinese labor costs, state subsidies and overcapacity as factors distorting the global EV market.
BYD paid an average of approximately 147,000 yuan ($21,400) per employee in total compensation in 2025, according to an analysis of the company’s annual report.
The figure covers salaries, bonuses, social insurance, and statutory benefits across a year-end headcount of 869,600 employees.
That average is roughly two times lower than the entry-level pay of assembly line workers at Rivian, Tesla and Lucid’s US plants, and around five to six times lower than company-wide averages at Rivian and Lucid.
The cost advantage extends beyond wages, however.
BYD received 12.5 billion yuan in Chinese government subsidies in 2025, according to its annual filing.
The European Commission concluded in its anti-subsidy investigation that Chinese-made BEVs benefit from state support at multiple levels of the supply chain — a finding that led to a 17% countervailing duty on BYD imports into the EU.
BYD‘s 2025 annual report also disclosed the company’s first major workforce reduction, with nearly 100,000 roles eliminated last year alone — bringing headcount down from 968,900 to roughly 870,000.
The cuts were concentrated on production lines, where industrial robots are displacing assembly workers, and fell disproportionately on lower-paid roles.
