Tesla's Berlin Gigafactory and Volvo’s Belgian plant on pause due to naval attacks in Red Sea

12 January 2024

Naval attacks in the Red Sea have forced Tesla to halt production at its Berlin Gigafactory. The rerouting of naval traffic causes a disruption in the supply chain, forcing manufacturing lines to go offline due to insufficient parts.

The conflicts in the Red Sea region have escalated to the point where attacks on transport vessels have become a common occurrence. These attacks are not only a matter of concern for global security but are also beginning to affect the European economy, particularly companies that source components from Asia.

Tesla announced that it will suspend a significant portion of the Model Y production at the Tesla Giga Berlin-Brandenburg plant in Grunheide, Germany. This production halt is scheduled to last for two weeks, from January 29 to February 11.

In an official statement, the company explained, "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."

The specific components that are missing remain undisclosed, but it's worth noting that Tesla relies heavily on parts from China, including the 2170-type cylindrical lithium-ion battery cells from LGES' factory.

Tesla isn't the only automaker feeling the impact of these disruptions. Volvo has also had to halt production due to attacks on vessels in the Red Sea.

Volvo Cars will temporarily suspend production at its Belgian plant, where Volvo XC40 is manufactured, for three days. The reason is the same - ships had to be rerouted to around one of the world's busiest shipping lanes, leading to delays in the delivery of essential components, such as gearboxes.

Volkswagen has stated that it does not anticipate "significant" production restrictions due to the Red Sea attacks. However, the automaker is closely coordinating with shipping companies to monitor the situation and assess its impact on production and market supply.

Via