Tesla’s Optimus robots hit by China’s rare earth export curbs

Tesla’s plans to mass-produce its Optimus humanoid robots have been disrupted by China’s recent export restrictions on rare earth magnets, CEO Elon Musk confirmed during the company’s Q1 2025 earnings call on Tuesday.

Musk said the production of Tesla’s advanced robots is being delayed as the company awaits export licenses from Beijing, which has tightened rules over concerns its rare earths may be used for military purposes.

“They’re just going into a humanoid robot,” Musk said, denying any military application.

China, which controls over 90% of global rare earth refining, imposed export curbs this month on heavy rare earths like terbium and dysprosium—key components in high-performance magnets used in robotics, electric vehicles, and defense systems.

Exporters must now apply for licenses from China’s Ministry of Commerce, with approvals taking six to eight weeks or more.

The development casts uncertainty over Tesla’s goal to produce thousands of Optimus robots by year-end. It also highlights broader geopolitical risks, as China’s curbs are seen as retaliation against US tariffs and part of a larger tech and supply chain standoff.

Tesla stock fell 5.8% ahead of the earnings call, after the company reported a 71% drop in Q1 profit to $409 million and missed revenue expectations by $2.1 billion.

Musk also acknowledged growing competition from Chinese robotics firms offering cheaper alternatives.

Analysts warn that unless Tesla secures alternative rare earth supplies, its robotics ambitions may stall.