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 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 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 carried out by the Department of Government Efficiency (DOGE).
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.”
