Houthi rebel attacks stifle Tesla production: Germany braces for ripple effects

Commercial vessels in the Red Sea are finding themselves under mounting attacks from Iran-backed Houthi rebels. At first glance, it may seem that this situation doesn't affect us. In reality, the opposite holds. To traverse the Suez Canal—a popular route connecting Europe and Asia—ships must navigate the Gulf of Aden and the Red Sea. This is where they are most exposed to the increasingly audacious and violent attacks by the Houthi rebels.

The precarious situation is forcing vessels to reroute around Africa, which substantially lengthens the journey and disrupts the supply of goods. The insufficient supply of components is why Tesla's German factory will be suspending operations for two weeks, from January 29th to February 11th, according to Deutsche Welle. The factory employs 11,500 people, with the American brand aspiring to produce up to a million vehicles there annually.

Tesla isn't the only company likely to face a crisis related to the Houthis' unlawful activities. The German Chamber of Industry and Commerce (DIHK) is already broadcasting warnings about the repercussions of extended delivery times from Asia. The same issue also affects European exports. Furthermore, increased transportation expenditures will inevitably surface in the prices of the delivered products. The ripple effects, as usual, will be felt by consumers.