Like Tesla, Volvo has decided to temporarily suspend production of its electric cars at its Belgian factory in Ghent. Like the American manufacturer, the brand’s European activities are disrupted by tensions in the Red Sea.
As you may know, the Israeli-Palestinian conflict has extended in recent weeks to the waterways of the Red Sea. Indeed, the Houthi rebels, a function supported by Iran, have increased attacks on merchant ships which circulate in this area. The organization justifies its acts of piracy as a war effort to help Palestine, currently targeted by massive Israeli bombardments after the raid carried out by Hamas on October 7, 2023.
Fatally, the current tensions in the Red Sea have direct consequences on the supplies of many companies worldwide. To guarantee the safety of their ships, companies which had become accustomed to taking this very busy route (12% of world trade passes through this strait) have decided to modify their roadmap.
After Tesla, Volvo also stops its production because of tensions in the Red Sea
From now on, cargo ships are ordered to pass through Africa and the Cape of Good Hope, which necessarily lengthens the journey of 10 to 20 days on average. These additional delays have a direct impact on the production capacities of several companies located in Europe. This is particularly the case for Tesla, which decided to suspend most of its activities at the Berlin Gigafactory for two weeks due to lack of components.
However, we have just learned that it is Volvo’s turn to bear the brunt of the tensions in the Red Sea. In fact, the Swedish manufacturer has chosen to suspend the production of its electric cars for 3 days within its Belgian factory in Ghent. As a reminder, it is there that the brand’s latest wattages are manufactured such as the XC40, the C40 or even the future EX30, the brand’s next small electric SUV. According to a statement from a Volvo spokesperson to our colleagues at Automotive News, deliveries of electric cars and production rates at its other European site, namely Gothenburg in Sweden, will not be affected by this pause in activities in Belgium.