Supply chain issues beginning to bite – Germany hit

Tesla said on Thursday January 11th that supply chain disruptions meant that it would have to suspend production at its new German plant. “Due to a lack of components, we are forced to suspend vehicle production at the Gigafactory Berlin-Brandenburg between January 29th and February 11th, with the exception of a few sub-areas. The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also having an impact on production [at the plant].”

The firm said that the “considerably longer transportation times” were delaying its supplies, creating a gap in the constant flow of materials from Asian suppliers to its German plant. Tesla’s manufacturing facilities in China and the United States are not affected.

Tesla is not the only firm with supply chain issues caused by the Red Sea disruption. This week, the Federation of German Industries called for the German government to provide military protection for Red Sea shipping, warning of significant effects on the German economy if the attacks continue. Global furniture seller IKEA also warned of potential product delays.

Mediterranean ports in Europe have been the most affected by diversions round the Cape of Good Hope because the percentage increase in time taken is so much greater. Northern Europe is slightly less affected (in percentage terms) but suffers a not dissimilar absolute delay. These are considerably greater proportional delays than experienced by any other countries in the west.