- The metals of the rare earth form the powerful crucial magnets To produce hunting jets, smartphones and engines that feed the arms of Tesla’s humanoid robot, called Optimus. CEO Elon Musk is optimistic. The company will have thousands of optimus units by the end of the year, but the company can wait for an export license from China, which controls more than 90% of the market, for six months or more.
Elon Musk is confident that Tesla will eliminate a million of her Humanoids Optimus robots by the end of the decade – or even in 2029. For the moment, however, production will only “as quickly as the slowest and cheapest component of all this”, he told investors on Tuesday – and President Donald Trump Battle has created a significant obstacle.
As part of its reprisals against Trump’s trade beards, Beijing has strengthened export controls on seven rare-Terraine metals, a decision that highlights the domination of China in an essential market to do everything, smartphones fighter planes. Especially for Tesla, these metals are essential to small but powerful engines that Musk dit will soon allow optimus robots to perform household tasks and work on the mounting lines of the electric vehicle manufacturer.
“I am convinced that we will overcome these problems,” Musk said on Tuesla’s first quarter of the first quarter. “And we will have thousands of Optimus robots at the end of this year.”
However, Tesla apparently has no choice but to go through China. The country controls almost 70% of all American imports of rare land, according to S&P Global Market Intelligence.
But this statistic only begins to describe the extent of the supremacy of Chinese minerals. Optimus engines, such as smartphones chips, require these metals because of their ultra-magnetic properties. According to a 2023 report of Aspen InstituteBeijing controls 92% of world magnet production from rare land.
These so-called “permanent magnets” are also generally crucial in the production of electric vehicles, but Musk said that Tesla, “overall”, does not need it. He said that the design of Optimus, however, requires that these magnets feed the robot arms with engines that will not overheat or will not break in a small space.
“These were affected by the China supply chain, in practice, an export license to send rare lands magnets,” said Musk. “So we work through this with China. I hope we have a license to use rare-Terraine magnets. ”
These licenses for shipments to the United States will probably not be processed for at least six months, Yang Jie, a lawyer for export control to the Shanghai Huiye law firm, said The New York Times.
“China wants certain assurances that these are not used for military purposes, which is obviously not,” said Musk. “They enter a humanoid robot.”
The prices hurt Tesla
Musk may have spent more than $ 250 million and a lot of his time to help Trump win the presidency, that Dan Ives de Wedbush Securities called a “poker movement for ages” at the time, but it is clear that the deployment of the chaotic price of the administration made a few favors.
While Musk has managed the controversial department of government efficiency (DOGE) – he told investors that he would soon withdraw from this role to refocus on Tesla – his calls to avoid climbing trade tensions seem to be largely falling into the ears of a deaf. The richest man in the world clashed several times with Peter Navarro, one of Trump’s best commercial advisers, whom Musk called a “moron” and “dumber a bag of bricks”.
Tesla’s net profit decreased by 71% in annual shift in the first quarter, automotive income, car income dropped by $ 14 billion for the first time in almost three years.
Musk said that the company’s localized supply channels on markets like America, Europe and China have put Tesla in a better position than competitors for metere the growing trade tensions. However, he recognized that the prices are hard for a company when the margins are still low. Tesla’s gross margin fell to 16.3% in the first quarter, against 17.4% in the same period last year.
“I am registered several times by saying that I believe that the lower prices are generally a good idea of prosperity,” said Musk. “But this decision is fundamentally up to the elected representative of the people being the President of the United States. So I will continue to plead for lower prices rather than higher rates, but that’s all I can do. ” There are signs that Musk’s message becomes more traction in Washington: in a closed door event organized by Jpmorgan Chase, China Scott Treasury Scott reported a possible “De-Eescale” with China. Trump also indicated that prices will drop considerably if a trade agreement is concluded.
This story was initially presented on Fortune.com
