The world’s largest car carrier, BYD ”Shenzhen”, loads more than 7,000 new BYD electric vehicles at Haitong Terminal in Taicang Port Area, Suzhou Port, and departs by ship to Brazil in Taicang City, Jiangsu Province, China, on April 27, 2025.
Nurphoto Nurphoto Getty Images
Electric car maker BYD has become the first Chinese business to be brought up in the European Parliament over allegations of labor abuse in Hungary, CNBC has learned, following the watchdog’s investigation into working conditions at the site.
Contractors hired to build the BYD factory in Hungary are said to be employing thousands of workers who work seven days a week, with shifts lasting more than 12 hours a day, according to a report published on April 14 by the New York-based watchdog, China Labor Watch (CLW). The group said it interviewed 50 workers and visited the firm’s premises three times from October 2025.
China Labor Watch, a US-based non-profit organization that has tracked labor conditions since it was founded in 2000, shared the report’s findings with EU government representatives. Earlier this month, three members of the European Parliament officially asked the European Commission about alleged abuse of workers in Hungary.
The allegations by China Labor Watch mark the first time allegations of labor abuses related to the production of a Chinese-owned car business in the European Union have been brought to the European Commission, according to CNBC checks.
In February, a worker was reported to have died on site during a crane operation. Citing interviews with workers, CLW founder Qiang Li told CNBC that there have been many deaths at the site.
He added that, based on interviews with workers, comprehensive medical support is not enough as people are not always employed on work visas with accompanying medical insurance.
Hungary’s National Ambulance Service told CNBC on Thursday that since February 1, emergency medical services have been called to the factory site 12 times, with one death.
These latest allegations have come as BYD has grown into an automotive powerhouse, surpassing Tesla as the world’s largest electric car manufacturer by 2025. BYD is among a wave of Chinese companies expanding overseas, aiming to sell more than a million cars outside China this year as the domestic market falters.
Another contractor named in the report, AIM Construction Hungary, is a subsidiary of Jinjiang Construction Group — the same company linked to the 2024 scandal at a BYD factory in Brazil that the country’s labor authorities said, following an investigation, involved “slavery-like” conditions.
BYD demanded in December 2024 to stop working with the Brazilian Jinjiang Construction subsidiary after the scandal. But the CLW report’s allegations show that BYD hired another subsidiary of the same Jinjiang group to build a factory in Hungary. The report said CLW reviewed a sample labor contract for jobs at BYD’s Hungarian factory, which included an option to export to Brazil and Turkey, where BYD is also building a factory.
AIM Construction Hungary was previously known as China Jinjiang Construction Hungary, according to company records from the Hungarian Ministry of Justice, accessed through an authorized data provider.
BYD and the Jinjiang Group did not respond to CNBC’s requests for comment. The authorities in the EU also did not respond.
The facility in the southern Hungarian city of Szeged is one of BYD’s five locations in Hungary, where the automaker established its European headquarters nearly a year ago during a visit by chairman Wang Chuanfu.
He was forced to stay
The EU raised tariffs on electric cars made in China by 2024, in a bid to boost local production. But cars made in China still rose to a record 9.3% of new car sales in the bloc in December, according to Rhodium Group.
BYD is rapidly increasing its market share. New BYD vehicles registered in the EU doubled in the first two months of the year to 29,291, overtaking Tesla and gaining 1.8% of the market, according to the European Automobile Manufacturers’ Association.
By model, BYD’s Seal U ranked third for January registrations, behind Renault and Skoda models, according to European Commission data. More than two-thirds of new passenger cars sold in Europe in January were electric.
Hungary has received the lion’s share of China’s growing automotive investment in Europe over the past three years, according to Rhodium Group data.
BYD’s Szeged plant is expected to produce 300,000 vehicles a year at full capacity, although the timeline for reaching that target is unclear.
As construction of the factory continued, workers, most of them from China, were only allowed to rest when bad weather halted work, according to CLW.
The management “wanted to start producing cars in January [2026]so they were chasing the project timeline — they weren’t letting workers go,” Li said in Mandarin, translated by CNBC.
The Szeged facility is building BYD’s Dolphin Surf model, according to a company statement citing BYD Senior Vice President Stella Li. Local media reported in January that production on the case had begun.
CLW’s Li said contractors use a lot of financial resources to keep workers on-site. Some are promised free plane tickets if they work for more than six months; others had their wages withheld until their contracts were fulfilled, or were billed various things like rent even before they arrived at the site, according to the report.
Workers were ordered to tell labor inspectors that they only worked “five days a week, eight hours a day, with one hour of overtime,” the report said. CLW alleges that their working hours are in direct violation of the Hungarian Labor Code – which sets working hours at eight per day, and no more than 48 hours per week – and that their conditions match the International Labor Organization’s definition of forced labour.
When CNBC contacted Hungary’s National Directorate-General for Aliens Policing about the allegations, the government department said it “has taken the necessary steps within its jurisdiction to carry out investigations into the matters described in [CLW’s] presentations.”
Political upheaval
In Brazil, BYD’s labor issues have led to political consequences.
Luiz Felipe Brandao de Mello, the head of Brazil’s agency tasked with enforcing national labor standards, has been removed from his post, according to the government’s official gazette. Reuters reported, citing two sources close to the matter, that de Mello lost his position due to the decision to add BYD to a blacklist that restricts its access to loans.
Brazil’s Ministry of Labor added BYD to the list days ago – until a Brazilian court had to reverse that decision pending a final decision.
Brazil’s national association of labor inspectors did not respond to CNBC’s requests for comment.
