Yahoo Finance Tesla to resume Giga Berlin production following Red Sea disruption
Tesla's Giga Berlin plant manager says production will restart on Feb. 12.
Tesla (TSLA) has confirmed that it will restart operations at Giga Berlin following a production halt due to ongoing Houthi militia attacks on component suppliers using Red Sea transport routes.
According to German outlet Oldenburger Onlinezeitung (via Electrek), Giga Berlin plant manager André Thierig said production will resume on Feb. 12 after a shutdown that began in late January.
Thierig said that “the supply chains are intact again,” noting that Tesla has “the necessary security that all necessary production parts are available in sufficient quantities to be able to fully restart.”
Last month Tesla said supplier components coming from Asia would have to shift routes from the Red Sea and Suez Canal to around the Cape of Good Hope in South Africa, leading to longer lead times and gaps in supply chains.
Tesla's Giga Berlin exclusively builds the Model Y SUV for European and other select markets. Though the factory isn't as productive as Tesla plants in Shanghai and Fremont, Calif., it did reach 5,000 Model Ys produced in a week in May of last year, and Thierig said prior to the shutdown Giga Berlin reached 6,000 units per week. “Yes, we have broken this milestone,” Thierig said to Oldenburger Onlinezeitung.
Thierig said the the temporary production halt will not set Tesla back from reaching 6,000 units a week again as the factory ramps back up. According to Tesla, Giga Berlin has an installed annual capacity of 375,000 vehicles, whereas Giga Shanghai sits at over 950,000 units.
A two- or three-week shutdown means around 10,000-15,000 Model Y vehicles or so could be affected —which isn’t too glaring considering Tesla produced 1.846 million vehicles globally last year.
Tesla isn’t the only automaker affected by Red Sea transport disruptions. Swedish automaker Volvo also said in January it would be halting some production at a plant in Belgium due to delays in getting gearboxes from suppliers forced to use longer shipping routes.
While restarting production at Giga Berlin is good news, Tesla shares have been hammered this year over concerns about the automaker’s production outlook, due to indications of slowing global EV demand.
In its latest earnings release late last month, Tesla said its "vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas," indicating it would not reach Street estimates of 2.19 million for 2024, which would have been a 21% increase from 2023.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
