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Red Sea crisis to halt Tesla production in Germany

US electric vehicle manufacturer Tesla will reportedly stop most car production at its factory in Germany for two weeks due to delays in parts deliveries as a result of attacks in the Red Sea.

Red Sea crisis to halt Tesla production in Germany

Attacks by Houthi militants on the main shipping route to the Suez Canal have disrupted maritime trade, forcing companies to use the much longer alternative route. Tesla is thought to be the first to recognise the impact on supply chains of the group, which has stepped up attacks on ships allegedly "going to Israel" in support of Hamas.

The automaker will suspend most of its production at Giga Berlin from 29 January to 11 February. However, it was not specified which components prevented the manufacturer from carrying out production shifts.

"The armed conflicts in the Red Sea and the associated changes in the transport routes between Europe and Asia via the Cape of Good Hope are also affecting production at Grünheide. Extremely long transport times are creating a gap in supply chains," it said.

Market players believe that other car manufacturers could also be affected by the crisis, as most of the electric vehicle and battery components used in Europe currently come from China and other Asian countries.

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