Tesla’s Optimus Bot is on display during the 2024 World AI Conference and High Level Conference on Global AI Governance held at the Shanghai World Expo Exhibition and Convention Centre on July 7, 2024.
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Tesla CEO Elon Musk says China’s new trade restrictions on rare earth magnets have affected the production of the company’s Optimus Humanoid robot, which is dependent on exports.
Speaking about the Tesla revenue call on Tuesday, Musk said the company is working through issues with Beijing and hoped it would get approval to access important resources.
Earlier this month, China imposed new export controls on seven rare earth elements and magnets used in everything from defense to energy and automotive technology. The move was retaliation against President Donald Trump’s escalating tariffs.
According to Musk, Beijing asked Tesla to ensure that rare earth magnets under expert control are not used for military purposes.
“China wants some assurances that these are not used for military purposes, but that’s obviously not. They’re just in humanoid robots,” he said.
The new restrictions that increased the risk of global shortages require exporters of the problem medium and heavy rare earths to receive a license from the China Ministry of Commerce in question.
China controls many of these rare earth markets, and the US is not ready to fill a potential shortage, according to the Center for Strategic and International Studies.
Meanwhile, the Trump administration has it In response to China’s export control, potential new tariffs on all US imports of important minerals.
Risk future growth?
During the proceeds call Tuesday, Musk highlighted the importance of humanoid robots to the company’s future plans.
“The future of the company is essentially based on large autonomous vehicles and large, large, huge, huge numbers of autonomous humanoid robots,” he said.
Previously, Musk had announced plans for Optimus As Tesla’s future business plan, it will produce around 5,000 units this year as technology grows. He further said Tesla will deploy the robots to EV factories.
It is unclear to what extent export controls will change these plans. But Musk reassured investors on Tuesday, saying the company plans to produce thousands of robots again this year, with thousands expected to be deployed at Tesla plants.
Emerging technologies have helped Tesla promote investor optimism as a struggle for the EV business, with its inventory dropping by around 37% per year.
Steve Westly, founder and managing partner of Westly Group and former Tesla board member, told CNBC’s “Closing Bell Overtime” on Tuesday that they need to find a new growth engine soon.
The company is expected to face tough competition with other humanoid robot players in China, including Unitree Robotics and Agibot. It is reportedly We plan to participate in mass production this year. According to some analysts, export controls could potentially give Chinese players another advantage over their US competitors.
Musk is brightening up about Tesla’s outlook in the space, but as long as he claims he’s ahead of the competition, he’s worried that the leaderboard will be filled with Chinese companies.
