Tesla and Volvo stopped production because of the Red Sea crisis

Due to the situation with the Houthis in the Red Sea, Tesla and Volvo Car have decided to temporarily stop production in Europe. The global supply chain is also being affected by the decline in the level of the Panama Canal.

Volvo Car, owned by Tesla and Geely, has decided to suspend operations at some European plants due to a lack of components, Reuters reports. The situation in the Red Sea region has caused disruptions in the supply chain.

Tesla told Reuters on Thursday that it was experiencing a shortage of parts after several shipments were diverted to the southern tip of Africa, forcing it to halt production of most vehicles at its plant near Berlin from January 29 to February 11.

"The armed conflict in the Red Sea and the associated changes in traffic routes between Europe and Asia via the Cape of Good Hope are affecting production at Grünheid," the company said in a statement.

Significantly longer transit times have created a gap in supply chains. At this time, it is not clear which electric vehicle components are delayed at the European plant.

Volvo Car, which is owned by China's Geely, also said it would halt production at its plant in Ghent, Belgium, for three days next week due to delays in transmission deliveries.

Global production and supply disruptions are also being adversely affected by drought-induced water levels in another important sea trade route, the Panama Canal.