Tesla Partially Halts Berlin Production Due to Red Sea Crisis

Tesla Partially Halts Berlin Production Due to Red Sea Crisis

Tesla has announced a temporary suspension of most car production at its plant near Berlin from January 29 to February 11. This decision is a direct response to component shortages arising from disruptions in shipping routes, triggered by the crisis in the Red Sea.

The crisis in the Red Sea, caused by attacks on ships by Iran-backed Houthi militants, has severely impacted Germany and various companies. Tesla is the first to halt production due to this crisis, with other firms like Geely and Ikea also reporting potential delivery delays.

In a statement, Tesla highlighted that the armed conflicts in the Red Sea and consequent changes in transport routes are impacting its Gruenheide production facility. The company cited significantly longer transportation times as the primary reason for the supply chain gap.

Industry-Wide Effects Predicted

Industry analysts foresee potential impacts on other automakers due to the Red Sea conflict. Sam Fiorani, Vice President of AutoForecast Solutions, noted Tesla’s heavy reliance on Asian, particularly Chinese, components for batteries as a vulnerability in its supply chain.

The supply issues are compounded by Tesla’s ongoing dispute with the Swedish union IF Metall over collective agreement terms. This dispute has led to solidarity strikes across the Nordic region, including actions by unionized workers at Hydro Extrusions, affecting component machining for Tesla.

Tesla did not comment on the potential impact of the Hydro Extrusions strike on production. The company plans to resume full production on February 12 but has not provided details on the missing components or strategies to restore production.

Major shipping companies, including Maersk and Hapag-Lloyd, have resorted to longer and more expensive routes around the Cape of Good Hope due to the Red Sea crisis. These changes result in increased transport times and fuel costs.

Tesla currently has no plans to alter production at its Shanghai plant, which will be closed for a week during the Chinese Lunar New Year holiday. The company also did not respond to comments about its Shanghai operations.

BMW Unaffected by Crisis

BMW reported no impact on its supply chain from the Red Sea attacks. Large shipping groups are adapting to the new logistical challenges, indicating longer-term adjustments to global shipping routes. icon

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