From Nasdaq:

Tesla will suspend car production at its Berlin factory due to disruptions in the Red Sea. The disruption is a result of attacks on vessels by Iranian-backed Houthi militants. This has impacted transport routes, leading to a shortage of components. The disruption adds to pressure on Tesla amid a labor dispute and a slowdown in the electric vehicle sector.

The disruption has forced Tesla to halt production, marking the first company to disclose an interruption in output due to the crisis. The company stated that the armed conflicts in the Red Sea and shifts in transport routes are affecting production in Gruenheide. This disruption will have a considerable impact on supply chains, resulting in delays for deliveries.

Tesla is facing additional challenges as it also battles a labor dispute and strikes. Unionized workers at Hydro Extrusions, a subsidiary of Norwegian company Hydro NHY.OL, have ceased work on components for Tesla car products. This adds further concerns to Tesla’s production and operations.

The disruptions in the Red Sea have led to major shipping companies avoiding the Suez Canal and rerouting vessels via the Cape of Good Hope. This has led to longer and more expensive journeys. Shipping giants such as Maersk and Hapag-Lloyd have been forced to take alternative routes, resulting in extra time and costs associated with fuel.

The rerouting of vessels through the Cape of Good Hope adds approximately 10 days to the journey from Asia to Northern Europe and incurs an additional $1 million in fuel costs. The impact of the disruptions in the Red Sea is not limited to Tesla, as companies in the electric vehicle sector are experiencing challenges due to the economic uncertainty and slower than anticipated sales.



Read more: EXCLUSIVE-Tesla Berlin to stop most output for two weeks due to Red Sea disruption