Overview

• China's recent export restrictions on seven rare earth elements have disrupted Tesla's production of its Optimus humanoid robot, particularly affecting the compact actuators reliant on rare earth magnets.
• Elon Musk stated during Tesla's April 23 earnings call that the company is negotiating with Chinese authorities to secure export licenses, with Beijing seeking assurances the materials won't be used for military purposes.
• Tesla remains optimistic about producing thousands of Optimus units by the end of 2025, though Musk acknowledged significant unpredictability in the production ramp-up due to supply chain complexities.
• The Optimus robot's development involves roughly 10,000 unique parts, many of which lack established supply chains, compounding the challenges posed by the geopolitical trade conflict.
• China's dominance in rare earth magnet production—over 90% of global supply—highlights the broader implications of the U.S.–China trade war on advanced manufacturing industries.