U.S. electric car maker Tesla announced on Thursday that it would suspend production at its German factory for two weeks due to parts shortages caused by rerouting shipping routes due to attacks by Houthi armed forces on the Red Sea.
“Significantly longer shipping times create gaps in the supply chain”Tesla wrote in a statement to AFP. The manufacturer added that production at Europe’s only factory on the outskirts of Berlin would be suspended from January 29 to February 11 “with the exception of certain sub-sectors”. “Production will resume at full capacity starting February 12,” Tesla said.
Since the outbreak of the war between Israel and the Islamist group Hamas, attacks by Yemen’s Houthi rebels in the Red Sea have led many shipping companies to avoid this vital route for global shipping.
Tesla said “armed conflict in the Red Sea and the rerouting of shipping routes between Europe and Asia via the Cape of Good Hope (South Africa) are also having an impact on production at its European factories”.
A blow to global trade
The Suez Canal, which connects the Mediterranean and the Red Sea, is the shortest sea route between Asia and Europe, and 12% of the world’s trade passes through the canal.
An alternative itinerary bordering the African continent extends the journey from 10 to 20 days, meaning significant additional costs for the company.
Tesla’s European factories near Berlin, which will open in 2022, employ about 11,500 people and the company says they produce more than 250,000 electric vehicles.
The Texas-based company plans to expand the factory to double production and employee numbers.
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