China's halt on a wide range of critical minerals and magnet exports in retaliation for U.S. tariffs has disrupted some of Elon Musk's plans to build humanoid robots. The very act of Beijing choking off supplies of critical components highlights the urgent need to friendshore or reshore rare earths mining and refining, as well as advanced technology supply chains, if the U.S. hopes to maintain its dominance into the 2030s.
On Tuesday, Musk revealed during Tesla's earnings call that plans to build humanoid robots had hit a snag due to Beijing's ban on certain rare earth metals and magnets critical for the motors and actuators that power the robots.
Musk told investors that Tesla's Optimus humanoid robots have electric motors that operate in a confined space and require special magnets:
"That's more affected by the supply chain, by basically China requiring an export license to send out anywhere with magnets, so we're working through that with China."
Musk warned that a shortage of magnets could slow down the production of Optimus robots.
That special, rare-earth magnet Musk was referring to is neodymium-iron-boron (NdFeB). It's crucial for powering the small, high-efficiency motors used in the robot's joints and other movements.
China has a near-monopoly on NdFeB, controlling both the extraction and refinement of the rare earths needed to produce powerful magnets.
Public trade data compiled by counterparty and supply chain risk intelligence firm Sayari shows that Tesla appears to have sourced all of its NdFeB from Chinese suppliers, including Beijing Zhongke Sanhuan High Technology...).
Sayari finds that 40.63% of the latest shipments to Tesla originate from China...
Tesla's Top Suppliers
The problem with most of the world's rare earth metal supply chains based in China is that Beijing can weaponize its global monopoly against the U.S. This poses a national security threat to the U.S. because these metals are used by US companies producing robotics, drones, electric vehicles, clean tech, handsets, and many other products, as well as in F-35 stealth fighter jets and nuclear-powered submarines.
Tesla's delay of the humanoid robot serial production plan in the U.S. is the clearest signal yet that America needs to friendshore or reshore these supply chains to produce the technologies of tomorrow and ensure dominance in the 2030s.
