Trade Dispute Delays Tesla's Robot Ambitions

(MENAFN) Tesla CEO Elon Musk says China's restrictions on rare earth element exports to the U.S.—a consequence of ongoing trade tensions—are disrupting production of the company’s Optimus humanoid robots.

According to reports, Tesla’s net profits plunged 71% in the first quarter of 2025, with Musk blaming the trade dispute for delays in robot development.

Speaking Wednesday, Musk confirmed Tesla is negotiating with Beijing to maintain access to essential materials. He emphasized the importance of the Optimus robots to the company’s future and dismissed claims that his negotiations are tied to military-related projects.

He stated the robots are intended for internal use within Tesla manufacturing sites.

The Optimus prototype debuted in 2022, and in 2024 Musk announced plans to integrate the robots into operations starting the following year.

Tesla’s January–March financial report reflected a 71% earnings drop, citing market instability and unpredictable trade policies as major challenges.

The company has also faced backlash tied to Musk’s political involvement.

The billionaire, who backed President Donald Trump’s 2024 campaign, was appointed to lead the U.S. Department of Government Efficiency (DOGE), where he initiated sweeping cost-cutting measures that included laying off thousands of federal workers.

Nationwide protests erupted outside Tesla showrooms, resulting in police action. Trump responded by publicly supporting Musk and purchasing Tesla vehicles.

Despite the initial stock boost following Trump’s election, Tesla’s momentum has faltered. The company’s shares have dropped 41% since the start of the year.

Musk stated he plans to scale back his government duties, limiting his DOGE involvement to one or two days a week, depending on Trump’s wishes, as he prioritizes Tesla’s current struggles.

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