Tesla halts German factory production amid Red Sea threats by Houthi rebels

The Red Sea, linking Asia with Europe and the Mediterranean via the Suez Canal, currently facilitates approximately 12 percent of global transport. This translates to about 50 daily ships carrying goods worth between 3 billion and 9 billion dollars, yielding a yearly total of over a trillion dollars.

Regrettably, the trade route has been facing frequent threats lately. Since mid-November of 2023, ships have been under recurring attacks from Houthi rebels, a Yemeni group that belongs to the Zaidite Shiite Muslim minority.

Several companies have put their shipments on hold in light of the regular attacks. Tesla, the car manufacturer, has temporarily shut down operations at its factory near Berlin due to a shortage of required parts.

Due to the lack of necessary components, we have no choice but to discontinue production at the Gigafactory Berlin-Brandenburg from January 29 to February 11, except for a few smaller departments, as announced in a statement issued on Monday, January 29.

Initial plans suggest that production is expected to restart on January 12. However, this depends entirely on the evolving situation in the Red Sea.

Due to the ongoing tension in Israel, the Houthis have intensified their attacks. They back Hamas and are attempting to pressure Israel into halting air raids on Gaza while permitting humanitarian aid. They've declared a resolve to target all ships headed towards Israel.

Many businesses are holding off until the situation improves and the assaults subside. On the other hand, some suppliers have rerouted their vessels to the Cape of Good Hope, significantly lengthening the journey and delivery timeline.