Electric car maker Tesla announced Thursday night that it would be temporarily halting most production at its German factory, citing supply chain disruptions due to the attacks in the Red Sea, a vital global shipping corridor.
The company said that its factory near Berlin, which makes Model Y vehicles and batteries, will pause from Jan. 29 to Feb. 11.
“The considerably longer transportation times are creating a gap in supply chains,” Reuters cited Tesla as saying in a statement.
"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 said in a statement.
Analysts expect that other automakers could suffer fallout from the Red Sea conflict, as shipping companies were also earlier reporting that they’re being forced to reroute vessels carrying goods and components on the longer route around the southern tip of Africa. Analysts say the detour adds 10 days or more to the journey.
The U.S. led airstrikes on Thursday against Yemen's Houthi rebels in response to their attacks on Red Sea shipping.
Tesla said normal operations are expected to resume on Feb. 12. The factory in Gruenheide, southeast of Berlin, is Tesla's first in Europe. It opened in 2022 and employs some 11,000 workers.
