Car companies Tesla and Volvo announced Friday that they would temporarily suspend production at some of their European factories due to the increasing attacks by the Iran-backed Houthi militants in Yemen on ships in the Red Sea and the subsequent air strikes on the country by the United States and United Kingdom overnight.
Electric car maker Tesla will pause production of its vehicles in Germany for two weeks due to the Red Sea shipping route becoming a dangerous place to traverse. The world’s second biggest seller of electric cars joins the fast-growing list of companies that transport items through the Red Sea shipping route having to recalibrate their business strategies.
Tesla announced the decision to suspend operations at its factory in Grunheide, southeast of Berlin, in a statement on Friday. The facility is the carmaker’s only gigafactory in Europe and the first Tesla factory opened on the continent.
“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,” read Tesla's statement. “The considerably longer transportation times are creating a gap in supply chains.”
