^{Photo: The New York Times}

Chinese electric vehicle leader BYD is facing mounting scrutiny in Europe after allegations of labor abuses at its Hungary factory reached the highest levels of policymaking within the European Union. The issue has now been formally raised in the European Parliament, marking a significant escalation in oversight of Chinese manufacturing operations داخل the bloc.

The controversy stems from a report published by U.S.-based watchdog China Labor Watch, which investigated working conditions at BYD’s construction site in Szeged, Hungary. Based on interviews with around 50 workers and multiple on-site visits since late 2025, the report alleges that thousands of laborers were subjected to extreme working conditions, including shifts exceeding 12 hours per day and work schedules extending across all seven days of the week.

These claims have drawn serious attention from European lawmakers. Earlier this month, members of the European Parliament formally questioned the European Commission regarding the situation, making this the first known instance of labor abuse allegations involving a Chinese automotive manufacturer in the EU being raised at this level.

The report also highlights troubling safety concerns. A worker death during a crane operation in February was confirmed by Hungary’s emergency services, which reported 12 medical callouts to the site since early February. Additional unverified accounts suggest there may have been more incidents, raising concerns about overall workplace safety standards and emergency preparedness.

A key focus of the investigation is the role of contractors. One firm involved in the project, AIM Construction Hungary, is reportedly linked to Jinjiang Construction Group—a Chinese company previously associated with a high-profile labor scandal at a BYD factory project in Brazil. That earlier case involved conditions described by authorities as “analogous to slavery,” prompting BYD to cut ties with the Brazilian subsidiary at the time. However, the new findings suggest that another entity within the same corporate group may have been engaged for the Hungary project.

The report further alleges that workers—many of whom are believed to have been recruited from China—faced restrictive employment practices. These included withheld wages, recruitment-related fees, and conditional benefits such as return airfare tied to contract completion. Some workers were also reportedly instructed to provide misleading information to labor inspectors, understating both their working hours and overtime.

These practices, if confirmed, could violate Hungary’s labor laws, which limit working hours to eight per day and a maximum of 48 hours per week. The conditions described also align with international definitions of forced labor, particularly where financial or contractual pressure restricts workers’ ability to leave employment freely.

Hungarian authorities have acknowledged the allegations and stated that investigations are underway. Meanwhile, the broader implications are being closely watched across Europe, especially as governments attempt to balance attracting foreign investment with enforcing labor standards.

The timing is particularly sensitive given BYD’s rapid expansion across the European market. The company recently overtook Tesla to become the world’s largest electric vehicle manufacturer and is aggressively scaling its presence خارج China. BYD aims to sell more than one million vehicles internationally this year, with Europe serving as a key growth market.

Its Hungarian facility plays a central role in this strategy. Located in Szeged, the plant is expected to produce up to 300,000 vehicles annually at full capacity, including models like the Dolphin Surf. The site is one of five BYD operations in Hungary, which has emerged as a major hub for Chinese automotive investment in Europe over the past three years.

This expansion comes amid shifting trade dynamics. The EU imposed tariffs on Chinese-made electric vehicles in 2024 to encourage local production. Despite this, Chinese brands have continued gaining market share, accounting for a record 9.3% of new car sales in the bloc by the end of last year. BYD alone more than doubled its EU registrations in early 2026, reaching over 29,000 units and capturing approximately 1.8% of the market.

The allegations could complicate this growth trajectory. European regulators and consumers are increasingly focused on supply chain transparency, ethical sourcing, and labor compliance. Any sustained controversy may not only impact BYD’s reputation but also influence broader policy decisions بشأن foreign manufacturers operating within the EU.

The situation also echoes developments in Brazil, where labor disputes involving BYD contributed to political fallout, including regulatory action and leadership changes within labor enforcement agencies. That precedent underscores how labor issues can quickly escalate beyond corporate concerns into national and international policy debates.

As investigations continue, the outcome will likely shape how Europe approaches oversight of foreign industrial investments—particularly in strategic sectors like electric vehicles. For BYD, the challenge now extends beyond scaling production to ensuring that its global expansion aligns with local labor standards and international expectations.