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You might well ask, notwithstanding the terrible human cost, how can a localized war in a small strip of land off the Mediterranean cost affect global supply chains? Given the inflamed emotions and the growing number of attacks on Israeli tankers traversing international waters, the ongoing Israel-Palestine war in Gaza is about to stretch the global shipping timelines significantly, impacting a host of companies in the process. With Tesla already reeling from the anemic demand for its EVs, the upcoming significant price hikes for its China-sourced exports to the EU will likely have a substantially negative impact on the company's top-line metric.

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Based on my calculation, Tesla's order backlog was 91K at the end of Oct. A new update until the end of Nov is available here: https://t.co/TrVPtNa8Wn

The calculation is based on wait times for new orders on Tesla's website multiplied by daily prod rate for each trim level. pic.twitter.com/0edgk6jGQ4

— Troy Teslike (@TroyTeslike) December 4, 2023

As a result of its aggressive price cuts that have ravaged the wider EV industry, Tesla has been able to maintain demand for its electric vehicles in the face of greater consumer discernment. As per Troy Teslike's estimation, Tesla's global order backlog in October stood at around 91,000 units.

These hard-won gains, however, are now being threatened from an unexpected avenue: the ongoing war between Israel and Palestine in Gaza.

Today, there were four attacks against three separate commercial vessels operating in international waters in the southern Red Sea. These three vessels are connected to 14 separate nations. The Arleigh-Burke Class destroyer USS CARNEY responded to the distress calls from the…

— U.S. Central Command (@CENTCOM) December 3, 2023

Today alone, there were four attacks on three different commercial vessels traversing the international waters in the southern Red Sea, according to the US Central Command.

Caixin: "The recent spate of attacks against Israel-linked vessels could force cargo ships to divert from the key Red Sea shipping route, significantly increasing the cost and time of Chinese car exports to Europe, a logistics expert told Caixin."

The Chinese publication Caixin now believes that should the current momentum of attacks continue, it would force ships heading to the EU from China to take a detour "around the Cape of Good Hope at the southern tip of South Africa," increasing the cost of car exports by around 20 percent.

Do note that as per the data from the CPCA, Tesla managed to sell just 82,432 EVs in China in November, constituting a year-over-year decline of around 18 percent. Tesla typically tries to maximize its exports to the EU when faced with demand-related headwinds in China.

However, if the Gaza war now results in price hikes of around 20 percent for exporting China-made Tesla EVs, this demand bulwark for the EV giant will diminish, creating substantial headwinds for the company in the process. This is doubly important as Israel has signaled in recent days that it is preparing to continue waging war on Gaza for an extended period, exacerbating the fragility of global shipping lines that traverse the Red Sea.

Meanwhile, as per a study conducted by New York University and Columbia Law School and reported by the Globes publication, some traders in New York and Israel were able to obtain prior warning of Hamas' 07th October attack on Israeli civilians, as per the evidence suggested by massive short sales in the runup to that ill-fated attack. These claims, however, have been contested by the EVP of the Tel Aviv Stock Exchange, who asserts that short-sellers would have had to sign a "share lending agreement with a TASE member," giving regulators complete visibility over the transactions.

Note: The article has been updated with the response from the EVP of the Tel Aviv Stock Exchange.