SHANGHAI, Dec 22 Reuters Chinese automaker Geely warned on Friday its EV sales are likely to be impacted by a delay in deliveries due to the situation in the Red Sea, where Yemeni militants are attacking vessels, forcing shippers to take longer, more expensive routes.

Geely, China39;s second largest automaker by sales, told Reuters that most of the shipping firms it uses to export its electric vehicles to Europe have plans to go around the Cape of Good Hope to avoid the Suez Canal, the shortest route from Asia to Europe, due to the hostilities.

If the Red Sea issue remains unresolved, shipping firms are expected to adjust freight rates and result in rising transport costs, the company added.

A source in the logistics industry serving automakers in China, the world39;s biggest market for cars, said this rerouting would increase shipping costs fivefold, predicting a shortage of vessels by the secondhalf of January due to the longer time it takes for them to return to port.

Geely did not name the shipping companies and the industry source declined to be named as they were not authorised to speak to the media.

China exported a total of 1.63 million vehicles to Europe in the first 10 months of this year, up 147 from the same period a year ago, according to data from the the China Passenger Car Association CPCA. It did not give a breakdown for EVs.

Geely39;s warning bodes ill for other automakers in China as they seek to increase exports to Europe due to overcapacity and…