American electric vehicle maker Tesla announced this Thursday that it will suspend production at its German plant for two weeks due to parts shortages due to the diversion of transportation routes due to Houthi attacks in the Red Sea.
“Significant extension of transport time creates gap in supply chain”, Tesla wrote in a statement released to AFP. Production will be suspended between January 29 and February 11 at the sole plant in Europe, located outside Berlin, “with the exception of some subsectors,” the manufacturer added. “By February 12, production will be fully resumed,” Tesla said.
Attacks by Yemen’s Houthi rebels in the Red Sea since the start of the war between Israel and the Islamist group Hamas have caused numerous shipping companies to avoid this critical route for global shipping.
According to Tesla, “armed conflicts in the Red Sea and the diversion of transport routes between Europe and Asia through the Cape of Good Hope (in South Africa) also affected production at its European plants”.
A blow to global trade
The Suez Canal, which connects the Mediterranean Sea with the Red Sea, is the shortest sea route between Asia and Europe, through which 12% of the world’s trade passes.
An alternative journey along the border of the African continent extends the journey by 10 to 20 days and implies significant additional costs for companies.
Tesla’s European factory near Berlin is slated to open in 2022 and has about 11,500 employees who the company says will produce more than 250,000 electric vehicles.
The Texas-based company plans to expand the plant to double production and staff.
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