Tesla suffers from the fact that the car manufacturer still sources its batteries for production in Europe from China. The electric car manufacturer stopped production at its factory in Grünheide near Berlin until mid-February and pointed to delivery problems for parts from Asia: “The significantly longer transport times create a gap in the supply chains.”
Because of attacks by Houthi militias on container ships in the Red Sea, many freighters take a detour via the Cape of Good Hope and arrive around two weeks later. The Suez Canal in the Red Sea is considered the gateway to Europe. Shipping companies use it to transport a large proportion of goods to and from Asia, usually thousands of tonnes every day. According to production experts, Tesla in Grünheide is missing the battery cells from the Chinese supplier BYD. Tesla installs these in the Model Y vehicles here in Europe.
The production stop shows that Tesla is now more vulnerable to such delivery problems than many traditional manufacturers. Local car companies such as VW and BMW now predominantly source their electric car battery cells from factories in Europe, said Alexander Timmer from the consulting firm Berylls, which specializes in the automotive industry. The international group Hyundai/Kia is therefore less affected.
“The local manufacturers can now cover a large part of their demand for car batteries from European production,” said Timmer, referring to cell suppliers such as the Swedish manufacturer Northvolt, the Korean battery manufacturer LGChem with its plants in Eastern Europe and the Chinese car battery global market leader CATL operates a large factory in Thuringia.
“In general, car manufacturers have learned their lessons from the delivery difficulties of the Corona period,” says Timmer. They and their suppliers now relied almost entirely on local manufacturers – where he defines local as a radius of 2,000 kilometers.
In principle, this also applies to Tesla in Grünheide. When it started German production in 2022, the US car manufacturer built up a local delivery network that includes traditional German suppliers such as ZF and Freudenberg. But for the battery, Tesla in Europe continues to rely on the Chinese battery cell professional BYD, which is also a car manufacturer and Tesla’s largest competitor.
Things are different in the US homeland: Tesla produces its own batteries there. It was originally planned to set up its own cell production in Grünheide, but Tesla has shelved these plans for the time being.
Tesla is not only dependent on deliveries from China when it comes to batteries. Tesla’s second most important car, the Model 3, is also delivered to the European market from Tesla’s production in China. If the transport problems across the Red Sea continue or other problems arise in China trade, Tesla would be affected in two ways.
“There is always a trade-off between low labor costs and geopolitical risks,” says Timmer. And the industry has not yet learned enough here. People still focus too much on wage costs and are then surprised by geopolitical events like those in the Red Sea.
This time Tesla was hit, next time a traditional manufacturer could be the victim again. In order to prevent further effects on world trade, the USA and Great Britain carried out a major maneuver against the Houthi rebels on Friday night.
According to the US military, more than 60 targets at 16 Houthi military locations in Yemen were attacked. These included command and control points, ammunition depots, missile launch facilities, production facilities and air defense radar systems, the US Air Force said in a statement. The strikes were carried out from the air as well as from ships and submarines. Tomahawk cruise missiles were also used. The Ministry of Defense in London said four Eurofighters carried out attacks on two targets in the northwest of the country.
The aim was to weaken the Houthis, not to escalate the situation, said a government official in Washington. British Secretary of State for Defense James Heappey emphasized that it was a limited, necessary and proportionate response. “We are of course keeping an eye on the need to ensure that it does not trigger a regional escalation,” Heappey told Times Radio.
Sharp criticism of the maneuver came from the Houthis as well as from their allies Iran and Russia. The development is fueling fears that the numerous tensions and violent clashes in the region could escalate into a larger conflict in the Middle East. Houthi officials said they would continue attacks on merchant ships allegedly linked to Israel in the Red Sea.
This article first appeared in the business magazine “Capital”, which, like stern, is part of RTL Deutschland.
