Stop Tesla and Volvo production in Europe: too many Houthi attacks on cargo ships in the Red Sea

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By John

Car production by Tesla and Volvo has been disrupted by attacks on cargo ships in the Red Sea, which are slowing the delivery of Asian parts to European factories.

Tesla was the first car manufacturer to announce last night that production at its European plant would be suspended for fifteen days, between January 29th and February 11th. Located near Berlin, the Grunheide site produces the Model Y, the best-selling electric SUV on the continent.

Volvo’s plant in Ghent (Belgium) will also be closed for three days next week due to a shortage of gearboxes, the delivery of which has been delayed by “adjustments in transport routes”, the Chinese-Swedish manufacturer said at the ‘Afp. The plant produces the XC40 SUV and the C40 electric car.

Attacks on shipping vessels have increased in recent weeks between Africa and Yemen, near the strait that gives access to the Red Sea from Asia.
Since the start of the war between Israel and the Palestinian Islamist movement Hamas in the Gaza Strip, the increase in attacks has pushed some shipowners to avoid the area.
Houthi rebels, who say they stand in solidarity with Hamas, have warned they will target ships sailing off the coast of Yemen that have links to Israel.

To avoid the risk of attacks, container ships must take an alternative route around the Cape of Good Hope in South Africa, which is much longer and more expensive. The journey between Asia and Europe is extended by 10-20 days.
“Substantial increases in transportation times are creating a gap in supply chains,” Tesla wrote in a statement.
“The armed conflicts in the Red Sea and the shifting of transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production in Grunheide”, explained the American manufacturer. Production will fully resume from February 12, he assures Tesla.

For the moment, not all manufacturers are interested.
The Stellantis Group, in particular, has taken adequate measures to compensate for the temporary lengthening of some ships’ routes by using alternative transport solutions such as air and has had almost no impact on production to date.

Toyota France said the situation remained “fluid” at its Valenciennes plant in northern France, as did Hyundai at its Nosovice plant in the Czech Republic. But Renault’s plant in Clèon, north-west France, has suspended engine assembly for two half days this week. This pause was initially attributed in an internal message to attacks in the Red Sea, but Renault assured on Friday that it was actually due to a more traditional supply issue with a supplier.

For all manufacturers, many of the components needed to assemble cars are imported from Asia, particularly China, the world’s largest automotive market and the industry’s leading manufacturer. Automotive supply had already been deeply shaken by the Covid pandemic, followed by a chip shortage, leading to weeks of shutdowns between 2020 and 2022.