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- Tesla will pause most production at its gigafactory near Berlin for two weeks, Reuters reported.
- The EV maker said militant attacks in the Red Sea were disrupting transport routes.
Tesla is temporarily halting most production at its factory in Germany because of militant attacks on vessels in the Red Sea.
The pause will take place from January 29 to February 11 at the EV maker’s gigafactory in Grünheide, which is about 19 miles from Berlin, Reuters reported.
The global shipping industry has begun to feel the repercussions of the attacks, which have disrupted transportation routes.
Tesla said the disruption could mean up to 7,000 vehicles not being built, Susannah Streeter, head of money and markets at Hargreaves Lansdown, wrote in a Substack newsletter on Friday.
“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 Gruenheide,” Tesla told Reuters in a statement.
The company added, “The considerably longer transportation times are creating a gap in supply chains.”
Iran-backed Houthi rebels have carried out 27 attacks on ships passing through the Red Sea since mid-November during the Israel-Hamas war. The attacks have disrupted international trade and the US and UK have warned the Houthis that if the rebels continued to attack, they would face consequences.
Streeter said in her newsletter, “This will affect most of the manufacturing plant’s production and is a big spanner in the works for production of the Model T SUVs.”
She added, “The company has flagged that it could lead to around 5,000 — 7,000 vehicles not being built. It will be a fresh blow to Tesla’s production targets and comes amid fierce competition from Chinese manufacturers, with BYD knocking Tesla off its perch as the world’s top EV producer.”
About 20% of shipping has been disrupted the chaos, Streeter wrote in her newsletter. She added that the disruption “could last for many months” and create “huge headaches” for many global companies.
The production halt adds to mounting troubles for Tesla in Europe as it faced strikes in Sweden for several months. Workers are hoping to trigger a collective agreement.
The strikes have spilled over to Denmark and Finland, where labor groups have joined in solidarity. Then Norway’s biggest private-sector union, Fellesforbundet, said it would block Tesla shipments en route to Sweden to send a “clear signal to Tesla,” Reuters reported at the time.
Tesla didn’t immediately respond to Business Insider’s request for comment, made outside of normal working hours.