In response to heightened security concerns due to shipping re-routed away from the Red Sea and Suez Canal, Tesla and Volvo have temporarily suspended production at their European facilities. Tesla announced that its Gigafactory near Berlin would experience a production hiatus from January 29 to February 11 due to a shortage of components affected by altered shipping routes. The re-routing, prompted by the threat of attacks from Iran-backed Houthi militants in Yemen, has led to extended transportation times and disruptions in the supply chain.
Tesla’s Berlin-Brandenburg Gigafactory, situated near Gruenheide, assembles electric vehicles for the European market. The company did not specify the components facing delays, impacting the factory’s operations.
Similarly, Volvo, majority-owned by China-based firm Geely, disclosed a three-day pause in production at its Ghent, Belgium plant. The interruption is attributed to delayed deliveries of gearboxes, a consequence of the altered shipping routes.
The Red Sea and Suez Canal have witnessed disruptions as some tanker operators cease traversing due to Houthi attacks on shipping. Shipping giants like Maersk and Hapag-Lloyd have also rerouted shipping around Africa, incurring additional expenses and a longer duration.
The Iran-backed Houthi militants, protesting Israel’s actions against Hamas in Gaza, have targeted vessels in the Red Sea. Despite their assertion to only target Israeli or Israel-bound ships, several affected vessels have had no connection to Israel.
In response, a coalition of 14 countries, including the U.S., issued a joint statement holding the Houthis accountable for threatening lives, the global economy, and disrupting commerce in critical waterways. The U.S. Navy and the British Royal Navy, part of Operation Prosperity Guardian, have intercepted drones and missiles fired by the Houthis, aiming to safeguard shipping from attacks and piracy.
Recent developments have seen the U.S. and U.K. joined by several other nations in launching airstrikes against Houthi targets in Yemen as a countermeasure to the growing threat.
