Electric car maker Tesla announced Thursday that it would suspend most of its production for two weeks at its European factory near Berlin, citing a shortage of parts due to lengthened shipping routes due to attacks in the Red Sea.
“The significant increase in transportation times is creating a gap in supply chains,” Tesla wrote in a statement.
Since the start of the war between Israel and the Palestinian Islamist movement Hamas in the Gaza Strip, the increase in attacks near the strategic Bab el-Mandeb Strait, which separates the Arabian Peninsula from Africa, has pushed certain shipowners to avoid area.
According to Tesla, “armed conflicts in the Red Sea and the change of transport routes between Europe and Asia through the Cape of Good Hope also have repercussions on production in Grünheide”, the city south of Berlin where Tesla has opened its only European factory.
A shock to global maritime trade
The Suez Canal, which connects the Mediterranean with the Red Sea, is the shortest maritime route between Asia and Europe. It is one of the main maritime traffic routes through which 12% of world trade passes.
The alternative route 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. In addition to lengthening the trip between Asia and Europe by between 10 and 20 days, this detour entails significant costs for companies.
Some 11,500 employees work at the Tesla factory near Berlin, opening in 2022, which produces, according to the company, more than 250,000 electric cars a year with a long-term goal of 500,000 units. Tesla plans to expand the factory to double production and the number of employees.
Source: BFM TV
