Tesla's Optimus Robot Faces Export Hurdles in China Amid Rare Earth Magnet Concerns

Tesla's Optimus robot trips over China export licensing

Officials seek assurances that bot won't be used for military applications Elon Musk says supply chain disruption in China held up delivery of a key component for Tesla's "Optimus" robot, with authorities reportedly demanding an export license and guarantees about military applications. During an earnings call following Tesla's lackluster calendar Q1 results in which revenue slumped 20 percent to $12.925 billion and net income plunged 70 percent year-on-year to $420 million, Musk talked of difficulties in obtaining rare earth magnets used in robot motors. "We're working through that with China," he said. "Hopefully, we'll get a license to use the rare earth magnets. China wants assurances that these are not used for military purposes, which obviously they're not. They're just going into a humanoid robot. So that's not a weapon system." "There's not like an existing supply chain for the motors, gearboxes, electronics, actuators, really anything in the Optimus apart from the AI4, the Tesla AI computer, which is the same as the one in the car. "So when you have a new complex manufactured product, it will move as fast as the slowest and least lucky component in the entire thing. And for approximation, there's like 10,000 unique things." The billionaire, who previously predicted that a Tesla car would be able to make a driverless trip from Los Angeles to New York, said on the call: "Anyone you tells you they can predict with precision, the production ramp of the truly new product - doesn't know what they're talking about." Musk has grand plans for the Tesla bot and told investors that thousands of them would be produced "by the end of this year." Limited production of Optimus - around 5,000 units - will see the robots used internally in Tesla factories. Another run is scheduled for 2026 and these may be sold to paying customers. As for predicting the robot's wider production ramp - even with the supply chain issues - Musk said: "I feel confident in getting to a million units per year in less than five years. So, by 2030, I feel confident in predicting a million Optimus units per year. It might be 2029." Musk, who also confirmed in the call that he would be reducing his DOGE duties, has said Optimus will eventually be a bigger earner for Tesla than the company's self-driving vehicles.

Musk says China's blocking of rare earth magnets will hit Tesla humanoid robots

Tesla CEO Elon Musk said Tuesday that China's decision to block the exports of rare earth magnets in response to President Trump's tariffs will slow the rate of production for the company's Optimus robots, which are set to perform human daily functions. Musk said the rare earth magnets are needed for the arm of the robots in order to allow the machine powered by artificial intelligence (AI), to fit in small spaces. China has approximately 44 million metric tons of rare earth metals, making it the largest reserve on Earth and therefore the top producer of rare earth magnets through national mining according to the World Population Review. "Permanent magnets for this motor is more affected by the supply chain, unified by basically China requiring an export license to send out anywhere with magnets. So we're working through that with China," Musk said during Tesla's earnings call on Tuesday. "Hopefully we'll get a license to use the rare earth magnets. China wants some assurances that these are not used for military purposes, which obviously they're not," he added. The CEO said he was confident the company would be able to overcome these issues. Tesla's delay in the development of Optimus robots comes as the tech manufacturer saw a 71 percent drop in quarterly earnings. The skyfall follows Musks heavy participation in government downsizing and cuts under the Department of Government Efficiency's (DOGE) cuts. In the face of continued pushback and outrage amid financial turmoil, the CEO told investors Tuesday he would cut back on his time at the White House by next month while pushing for lower tariffs before his exit, citing the concept as generally a "good idea for prosperity." "Starting probably next month, May, my time allocation to DOGE will drop significantly," Musk said. "I'll have to continue doing it for, I think, the remainder of the president's term just to make sure that the waste and fraud doesn't come roaring back, which we'll do, if it has the chance." Despite his promise to redirect his attention to Tesla, a group of eight state treasurers questioned Musk's leadership of the electric vehicle manufacturer. "Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government," the letter to Robyn Denholm, chair of Tesla's board, stated. "These external commitments raise serious questions about whether Tesla's leadership is fully engaged in addressing the company's core challenges."