Tesla will be shutting down most of its production at Giga Berlin for a period of at least 2 weeks at the end of this month as the automaker deals with a disrupted supply chain due to the ongoing crisis in the Red Sea.
In a statement on Thursday Tesla said it will suspend production at Giga Berlin between January 29 and February 11, explaining that the conflict in the Red Sea has extended shipping times for parts from China. This has resulted in a gap in their supply chains that they hope will be corrected through the two-week shutdown.
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. The considerably longer transportation times are creating a gap in supply chains.”Tesla said in a statement (via Reuters)
For Giga Berlin, the two-week shutdown, which will impact “most” of the factory’s production, will likely result in about 5,000-7,000 Model Y SUVs not being built. While Giga Berlin did hit a production target last year of 5,000 Model Ys per week, the factory has been unable to sustain that level of output, and currently produces about 4,000 units or less per week.
The Red Sea crisis has seen attacks on commercials vessels by Yemen’s Houthi rebels. The attacks are being carried out to show support for the Palestinian Islamist group Hamas fighting Israel in Gaza. The attacks, which have been stepped up in recent weeks, has forced the world’s top shipping companies to alter their regular shipping routes from Asia to go around Africa and the Cape of Good Hope, instead of the much shorter route through the Suez Canal.
The extra distance adds about 10 days for the average ship departing Asia to Europe. The impact is more than just a longer route, also adding an extra $1 million to the fuel bill.