Tesla will idle its Germany plant for two weeks because of supply chain issues. File Photo by Keizo Mori/UPI | License Photo
Tesla said Friday it will suspend its German operations for two weeks beginning at the end of the month in response to postponed deliveries due to Houthi rebel attacks in the Red Sea.
The company said work at its Berlin-Brandenburg Gigafactory will largely halt from Jan. 29 to Feb. 11 as parts deliveries have been delayed with major shipping companies forced to take longer routes to stay out of harm’s way. Advertisement
“The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Grunheide,” Tesla said.”The considerably longer transportation times are creating a gap in supply chains.”
Some assembly sections will remain online but CEO Elon Musk said the pause could lead to as many as 7,000 cars not making it to market.
The German facility hosts more than 11,000 workers and annually produces about 250,000 vehicles.
Maersk, one of the world’s shipping container leaders, announced earlier this month that it was ending its routes through the Red Sea for the foreseeable future after one of its ships was attacked by Houthi rebels, which is supported by Iran. Advertisement
The rebels, who tried to board the vessel was several small boats were only deterred by the rival of armed helicopters by the U.S. Navy, which sank most of the militant’s ships.
Supply chain issues have also snarled furniture DIY maker Ikea, which warned customers in December that it was avoiding the Suez Canal and the Red Sea because of Houthi attacks opting to ship around Africa.
On Thursday, the United States and Britain responded to the Houthi attacks by striking more than a dozen military targets in Yemen in hopes of diminishing the rebels’ capabilities. Some fear, though, the attacks could embolden the Houthis to widen their attacks.
