Tesla suspends production in Europe due to shipping problems in the Red Sea

The American electric vehicle manufacturer Tesla announced this Thursday that it will stop production for two weeks at its German plant due to a shortage of parts due to the diversion of transportation routes due to Houthi attacks in the Red Sea.

“Significant extension of transportation time creates gaps in supply chains”, Tesla wrote in a statement sent to AFP. Production at Europe’s only plant on the outskirts of Berlin will be suspended between January 29 and February 11, “except for a few sub-regions,” the manufacturer said. “Production will fully resume on February 12,” Tesla said.

Many shipping companies have avoided this vital route for global shipping due to attacks by Yemen’s Houthi rebels in the Red Sea since the start of the war between Israel and the Islamist group Hamas.

According to Tesla, “the armed conflict in the Red Sea and the diversion of transportation routes between Europe and Asia through the Cape of Good Hope (in South Africa) also have an impact on production at its European plant”.

shock to global trade

The Suez Canal, which connects the Mediterranean Sea to the Red Sea, is the shortest sea route between Asia and Europe, through which 12% of world trade passes.

The alternative itinerary bordering the African continent lengthens the journey by 10 to 20 days and implies significant additional costs for companies.

Tesla’s European factory near Berlin opens in 2022 and has about 11,500 employees, with the company saying it produces more than 250,000 electric vehicles.

The Texas-based company plans to expand the plant to double production and employees.

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