Conflict In The Red Sea Begins To Affect European Automotive Industry, Tesla Temporarily Closes Factory

Tesla Giga Berlin. (Doc. Tesla)

JAKARTA - Tesla has temporarily suspended production of its electric car at the Berlin Gigafactory, due to disruptions to supply chains that make parts short.

It is known that in recent weeks tensions in the Red Sea region have increased, plus in the past week the United States (US) and Britain have taken action by attacking several Houthis, in Yemen.

Although previously the Houthis had only attacked Israeli-affiliated ships, it was feared that after the US and UK attacks it would have an impact on other ships, especially ships bound for Europe.

According to a report from ArenaEV, Monday, January 15, the attack on the Red Sea began to have an impact on the automotive industry in Europe, especially companies taking components from Asia.

Tesla announced it will halt most of the production of Model Y at the Tesla Giga Berlin-Brandenburg plant in Grunheide, Germany, for two weeks which runs from January 29 to February 11, 2024.

The armed conflict in the Red Sea and the shift in transportation routes between Europe and Asia through Tanjung Harapan also have an impact on production in Gruenheide. The much longer transportation time is creating a gap in the supply chain," wrote Tesla's official statement.

Specific components that do not reach Germany are still kept secret, but it should be noted that Tesla relies heavily on spare parts from China, including the type 2170 cylindrical lithium-ion battery cell from the LGES plant.

Tesla is not the only car manufacturer to feel the impact of this disruption in the Red Sea. Volvo must also stop production due to attacks on ships in the Red Sea.

The well-known manufacturer temporarily suspended production at its Belgian factory, where Volvo XC40 was produced, for three days. The reason is the same, the high price of components due to ship operations being diverted to one of the busiest shipping lines in the world, causing delays in sending important components, such as gear boxes.

Meanwhile, Volkswagen has stated that it is not anticipating "significative" production restrictions due to attacks in the Red Sea. However, the automaker is coordinating closely with shipping companies to monitor the situation and assess its impact on market production and supply.