Tesla’s ambitious plans to mass-produce its Optimus humanoid robot have hit a significant roadblock: China’s tightening grip on rare earth exports. The company relies on specialized rare earth magnets for the robot’s compact actuators—components that are now subject to new export licensing rules imposed by Beijing. These restrictions, introduced earlier this month, are part of China’s broader response to escalating U.S. tariffs and have disrupted Tesla’s supply chain.
Elon Musk, speaking during Tesla’s Q1 earnings call, acknowledged that Optimus production is being delayed by what he called a “magnet issue.” He emphasized that the magnets are “just going into a humanoid robot,” not a weapon, but noted that China is seeking assurances that the components won’t be used for military purposes. Tesla is currently working with Chinese authorities to secure the necessary export licenses, a process that could take several weeks to months.
The export curbs affect not only raw rare earth minerals but also processed materials like magnets, posing a challenge for manufacturers worldwide. China produces the entire world’s supply of heavy rare earth metals, from ore mined in China and Myanmar, and 90% of magnets made with these metals. Analysts warn that the tightened controls on these essential materials—used in everything from electronics to defense systems—will be difficult to bypass or replace quickly.
Tesla had aimed to produce thousands of Optimus units by the end of 2025, with a goal of scaling up to one million units annually within five years. However, the rare earth supply chain disruption may significantly impact that timeline.
The situation underscores the strategic vulnerabilities facing tech and auto manufacturers dependent on rare earth resources. As supply chain pressures mount, companies like Tesla are navigating complex international regulations to keep innovation on track, while markets closely watch for updates on export approvals and production progress.
