Electric carmaker Tesla will largely suspend activity at its Gigafactory near Berlin due to shipping delays caused by missile attacks in the Red Sea.
Elon Musk’s company said Thursday it will soon run into supply chain issues due to the ongoing crisis sparked by Iran-backed Houthi rebels who have been targeting merchant vessels with missiles and drones in the vital waterway since December.
The Shia militia, an ally to the Palestinian militant group Hamas, claims to target Israel-linked ships exclusively, amid the Israel Defense Forces’ ongoing assault on the Gaza Strip.
Tesla vehicle production will be halted between January 29 and February 11 at the Berlin-Brandenburg facility, with the exception of a few assembly sections. Tesla’s stronghold in Germany employs more than 11,000 people and churns out around 250,000 cars per year.
Major freight liners, like the Mediterranean Shipping Company, Maersk and Hapag-Lloyd, decided earlier to divert their fleets away from the Red Sea and Egypt’s Suez Canal toward the Cape of Good Hope around South Africa. Moving goods between Asia and Europe instantly became more time consuming and expensive.
Tesla is the first major manufacturer to cease production activity due to the Red Sea attacks. China’s Geely and Sweden’s IKEA previously warned of possible delays to deliveries.
On Thursday night, a coalition of U.S., U.K. and allied international forces carried out airstrikes against Houthi positions in Yemen. The militant group vowed Friday morning it won’t cease its attacks against shipping.
