Tesla Halts Production at Berlin Plant for Two Weeks Due to Red Sea Attacks

Over a two-week period from January 29 to February 11, Tesla, the electric car manufacturer, will suspend the production of the majority of its vehicles at its German plant near Berlin, reports Electrek. The company explained that it is facing a component shortage due to changes in shipping routes caused by the crisis in the Red Sea, where Iran-backed Houthi rebels attack trade and military ships in solidarity with the Palestinian terrorist group, Hamas.

"Due to a lack of components, we are compelled to pause production at the Gigafactory plant in Berlin-Brandenburg from January 29 to February 11, with a few exceptions. The significantly extended transportation time creates gaps in the supply chains," Tesla stated. The American electric car manufacturer became the first company to announce a production pause due to disruptions related to events in the Red Sea. The company also noted that armed conflicts in the Red Sea and associated changes in transportation routes between Europe and Asia via the Cape of Good Hope are impacting production in the community of Gruenheide in Brandenburg.

Many companies, including China's second-largest car manufacturer, Geely, and the Swedish furniture production company, Ikea, have also warned of potential delivery delays. The vital maritime routes through the Red Sea, connecting Asia and the Mediterranean through the Suez Canal in Egypt, are affected by the ongoing crisis. Approximately 1/8 of global trade and 1/3 of global container traffic are transported through the canal, making it especially crucial for shipping between Asia and the Mediterranean.

Major shipping companies like Maersk and Hapag-Lloyd are forced to opt for longer and more expensive routes around the Cape of Good Hope, adding about 10 days to the journey from Asia to Northern Europe and increasing fuel costs by nearly a million dollars (910,000 euros). This impact extends to global trade and container traffic.

Recall that in the night of January 11-12, the U.S., in coordination with the UK and with the support of other coalition countries, conducted joint strikes on Houthi targets in Yemen. These strikes aimed to limit the Houthi's ability to attack civilian and military vessels in the Red Sea. The coalition targeted radar systems, anti-aircraft defence systems, as well as storage and launch sites for drones, cruise missiles, and ballistic missiles.