Red Sea attacks halt Tesla production at German plant
January 12, 2024
Electric car maker Tesla will suspend most car production at its factory near the German capital of Berlin for two weeks, the company said on Thursday.
"Due to a lack of components, we are forced to suspend vehicle production at the Gigafactory Berlin-Brandenburg between January 29 and February 11, with the exception of a few sub-areas," Tesla said in a statement.
The company blamed the component shortage on shifts in shipping routes caused by the crisis in the Red Sea, where Iranian-backed Houthi militants have been attacking ships in solidarity with the Palestinian militant-Islamist group Hamas, which is fighting Israel in Gaza.
"The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Grünheide," Tesla said.
Red Sea crisis
The US electric vehicle maker is the first company to announce an interruption to output due to the disruption. Many companies, including Geely, China's second-largest automaker by sales, and Swedish home furnishing company Ikea, have warned of delays to deliveries.
The attacks by Iranian-backed Houthi militants have forced the world's top shipping companies to avoid the Suez Canal, the fastest maritime route from Asia to Europe. It accounts for about 12% of global maritime traffic.
Shipping giants such as Maersk and Hapag-Lloyd have been sending their vessels on longer, more expensive journeys around South Africa's Cape of Good Hope. The extra route adds about 10 days in a journey from Asia to northern Europe and about $1 million (€910 000) in extra fuel.
"The considerably longer transportation times are creating a gap in supply chains," Tesla said. The company has been manufacturing electric cars in Grünheide near Berlin since March 2022, with around 11,500 people employed there.
dh/sms (dpa, Reuters)