Trade War Disrupts Teslas Optimus Robot Production

The production of Tesla’s Optimus robots has been disrupted due to China’s restrictions on the export of rare earth metals, which have come as part of the escalating trade conflict with the United States, according to an article by Bloomberg.

During a shareholder meeting, CEO Elon Musk explained that the delays are caused by a «magnet issue.» As a result, weeks of setbacks are anticipated.

«We are in discussions with China regarding this. I hope to secure a license to use rare earth magnets. China is seeking assurances that these will not be used for military purposes, which is quite clear since they will be utilized in a humanoid robot,» he stated.

Musk, alongside former presidential candidate Vivek Ramaswamy, is leading the Department of Efficiency in Government under the US government, which aims to reform the administration to reduce bureaucratic costs and combat red tape.

In response to the tightening of tariffs by the US, China has added seven rare earth minerals to its export control list. Chinese authorities claim that these restrictions are necessary as the materials can be used in both civilian and military applications.

Musk pointed out that the tariffs will heavily impact the energy sector.

«The effect of these tariffs on our energy business will be significant since we source lithium iron phosphate (LFP) cells from China. We are in the process of setting up production for LFP cells domestically in the US,» he mentioned.

Recall that in June 2024, Musk announced plans to produce 1,000 or several thousand robots by 2025.

In October, at the «We, Robot» event, the entrepreneur showcased the Optimus robots as they interacted with a crowd, danced, conversed with guests, and made cocktails. However, it was later revealed that some functions of the robots were controlled remotely by humans.