Electric car maker Tesla said on Thursday it would halt most production at its European factory near Berlin for two weeks, citing parts shortages due to the lengthening of transport routes due to the Red Sea attacks.
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“The significant increase in transport times creates a gap in supply chains,” writes Tesla in a press release sent to AFP.
The American manufacturer adds that production will be stopped in the “Gigafactory” southeast of Berlin from January 29th to February 11th “except for a few areas”.
“From February 12th, production will fully resume,” assures Tesla.
Since the war between Israel and the Palestinian Islamist movement Hamas began in the Gaza Strip, an increase in attacks near the strategic Bab el-Mandeb strait that separates the Arabian Peninsula from Africa has pushed certain shipowners to bypass the area.
According to Tesla, “armed conflicts in the Red Sea and the shifting of transport routes between Europe and Asia via the Cape of Good Hope are also impacting production in Grünheide,” the city south of Berlin where Tesla has opened its only European factory.
The Suez Canal, which connects the Mediterranean with the Red Sea, is the shortest sea route between Asia and Europe. It is one of the most important shipping routes through which 12% of world trade passes.
The alternative route that container ships must take around the Cape of Good Hope in South Africa is much longer.
This security crisis is a shock to global maritime trade. This detour not only adds 10 to 20 days to the journey between Asia and Europe, but also involves significant costs for companies.
Around 11,500 employees work at the Tesla factory near Berlin, which opened in 2022 and which, according to the company, produces more than 250,000 electric cars per year, with a long-term goal of 500,000 units. Tesla plans to expand the factory to double production and the number of employees.