Tesla announces temporary halt to most car production at its Berlin factory

Tesla, the prominent US electric vehicle manufacturer, has declared a temporary pause in most car production at its Berlin factory. This decision, as reported by Reuters, is attributed to a shortage of components resulting from altered transport routes due to ongoing attacks on vessels in the Red Sea.

This marks the first acknowledgment of a production interruption directly linked to the Red Sea disruption, a consequence of Iranian-backed Houthi militants targeting vessels in solidarity with Hamas in Gaza. Numerous companies, including Geely and Ikea, have already cautioned about potential delivery delays.

According to a statement quoted by Reuters, Tesla stated, “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.”

Extended transportation times are causing disruptions in supply chains, impacting Tesla’s ability to maintain its regular production schedule. Industry analysts anticipate that other automakers might encounter similar challenges due to the Red Sea conflict.

Sam Fiorani, Vice President at AutoForecast Solutions, highlighted the vulnerability in relying heavily on key components from Asia, particularly China, where Tesla sources its battery components. Fiorani believes that while Tesla might be the first, it may not be the only automaker facing production issues due to the disrupted supply chain.

The production stop comes at a challenging time for Tesla, already entangled in a labor dispute with Swedish trade union IF Metall over a collective bargaining agreement, triggering sympathy strikes across the Nordic region. The disruption caused by the Red Sea crisis intensifies pressure on Tesla, impacting its production schedule and raising concerns about its ability to meet demand.

Although Tesla has not specified the components affected, it has announced that full production will resume on February 12, without providing details on how it plans to address the missing components and restore production to normal levels.