By FABIANO MAISONNAVE

CAMACARI, Brazil (AP) — When Chinese automaker BYD Co. announced plans to build a massive factory in the hardscrabble city of Camacari, in Brazil’s northeastern Bahia state, locals saw a new beginning. After years of economic stagnation following Ford Motor Co.’s exit from the region in 2021, there was hope that the global leader in electric vehicles would bring back well-paying jobs and a brighter future.

The timing seemed right. Brazil, the world’s sixth-largest auto market, is seeing a surge in EV sales—and BYD is leading the charge. For Camacari, the deal promised to fill the economic vacuum left by the American company, which had once been the city’s largest employer.

Then plans went off track.

A December raid led by Brazilian authorities rescued 163 Chinese nationals said to be working in “slavery-like” conditions at the site. A video from the Labor Prosecutor’s Office showed dormitories with beds lacking mattresses and makeshift cooking facilities. The company postponed plans to begin its first production line in March and has not established a new timeline, spreading fears among Camacari workers.

“When BYD announced it was coming here, it sparked a lot of hope in us,” said Luizmar Santana Pereira, a metalworker and former Ford employee, who has been working as a taxi driver. “We’ve been waiting for this job opportunity, but so far, we haven’t seen it.”

After the raid, a spokesperson based at BYD’s China headquarters denied wrongdoing, saying in a post on the Weibo social media site that the accusations were an attempt at “smearing” Chinese brands and China. The post also blamed “foreign forces” for the allegation and criticized media reports.

In a statement disseminated in Brazil, the carmaker adopted a more conciliatory tone. The company said it “does not tolerate disrespect for Brazilian law and human dignity” and rescinded the contract with Chinese construction company Jinjiang, which had brought the workers.

In Brazil, ample room for BYD to grow

EVs are spreading fast in Brazil, Latin America’s most populous nation. Sales jumped 85% in 2024, reaching over 170,000 units, including fully electric and hybrid vehicles, according to the Brazilian Association of Electric Vehicles. That accounted for about 7% of new car sales in the country.

The growth is spearheaded by BYD. Seven out of 10 EVs sold in the country are from the brand, which also leads hybrid sales. In major cities such as Sao Paulo and Brasilia, imported BYD cars and dealerships have become a common sight. In Brazil’s capital, it’s the best-selling brand, whether EV or gas-powered.

Another Chinese EV maker, GWM, also recently announced plans to open a factory in Brazil after acquiring a shuttered Mercedes-Benz facility in the industrialized state of Sao Paulo.

BYD’s inroads in Brazil are in tandem with the company’s global growth. The world’s leading EV company logged a record $107 billion in revenue in 2024 as its sales of electric and hybrid vehicles jumped 40%, surpassing American rival Tesla. This year, plans include the inauguration of its first car factory in Europe, currently under construction in Hungary.

Brazil’s policies are driving EV sales and production, according to Adalberto Maluf, national secretary of Urban Environment and Environmental Quality.

In an interview with The Associated Press in Brasilia, Maluf cited incentives enacted in 2024 that favor electric motors, tax reductions for lower-emission cars and a new air quality program with nationwide monitoring and pollution reduction goals.

Brazil is the one of the top 10 emitters of greenhouse gases, contributing around 3% of global emissions, according to nonprofit Climate Watch. However, pollution from energy does not play a big role, as about half of greenhouse gas emissions come from deforestation, mostly in the Amazon, followed by agriculture. About 85% of the country’s electricity comes from renewable sources.

For Maluf, who worked for almost nine years at BYD Brazil, the country is attractive to Chinese electric car makers for reasons ranging from the size of its market to the presence of several auto parts suppliers and the strong political relationship between the two countries.

“Brazilians have no geopolitical issues with China. If you ask, ‘Are you against China?’ most people won’t have a strong opinion about it,” he said.

“In the U.S., however, they do, because it’s part of the president’s rhetoric,” he added, referring to President Donald Trump’s frequent comments about China “ripping off” America on trade.

It’s unclear what is next for BYD factory

Since the raid, BYD has not allowed press visits inside its Camacari premises, citing concerns about trade secrets. It’s unclear if BYD is still on track to turn the former Ford site into its largest plant outside China by the end of 2026.

When AP journalists visited in March for several days, they saw only a few construction workers at the large site. And one day, while standing on the street adjoining the premises, three BYD guards, one who kept his hand on his gun, incorrectly accused the journalists of flying a drone inside factory boundaries and demanded to see identification. Minutes later, security guards on motorcycles approached, honking and ordering the journalists to stop filming workers.

BYD said its security guards acted appropriately and declined to answer other questions about its operations in Brazil.

While the future of the factory is unclear, the raid and the presence of Chinese workers have gotten the attention of labor unions.

“The Metalworkers Union will not tolerate Chinese workers on the production line. If that happens even in the beginning of the production, we will call for a work stoppage,” Júlio Bonfim, the union president, told AP. Bonfim added that there were no objections with BYD employing Chinese technicians and managers, but the factory floor must employ only Brazilians. It was unclear if BYD had agreed to that.

Despite the raid and seemingly slow pace of construction, in the Camacari region the shift from Ford to BYD is increasingly visible. A three-decades-old dealership for the American brand named Indiana, in tribute to the U.S. state, now shares space with a BYD reseller, Mandarim. A local hotel started distributing instructions specifically to Chinese guests, asking them not to hang washed clothes in common areas. And a state lawmaker introduced a bill to rename the city’s Henry Ford Avenue, where the plant is located, to BYD Avenue.

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