Tesla’s plan to build a humanoid robot army just got shut down before it even got off the factory floor. Elon Musk’s household robot project, Optimus, is officially in limbo after China dropped a hammer on the rare earth metals supply chain earlier this month.
Beijing added new restrictions on seven rare earth elements, locking out exports unless companies meet new permit rules. This is part of the growing trade war between Donald Trump’s White House and China, and Tesla is now one of the first major players to take a direct hit.
Just yesterday, on Tesla’s earnings call, Elon, who also advised the White House, confirmed the production freeze. As Cryptopolitanreported, Elon said, “We’re working through that with China. Hopefully, we’ll get a license to use the rare-earth magnets.” He blamed the hold-up on what he called a “magnet issue.”
Elon added that Beijing wants to be sure the magnets won’t be used for military reasons, saying, “which obviously they’re not. They’re just going into a humanoid robot.”
China enforces controls to block key tech metals
Beijing added the seven rare earths to its control list after Trump’s new tariffs kicked in. These metals are classified as dual-use materials, which means they can be used in both civilian gear and military weapons.
The elements in question are built into wind turbines, radar systems, optical lasers, fighter jets, jet engine coatings, EVs, and now Tesla robots.
While the metals are technically found all over the Earth, they don’t hang around in dense clusters. Extracting them takes multiple steps, and China owns the process from dirt to refinery.
The US, on the other hand, doesn’t have enough processing capacity to stand alone, leaving it exposed. These new restrictions are a direct response to Washington’s recent aggressive trade policies, and Tesla got caught in the crossfire.
The seven metals are: terbium, yttrium, dysprosium, gadolinium, lutetium, samarium, and scandium.
Elon Musk with President Donald Trump in the Oval Office. Source: Official White House Photo by Daniel Torok
Terbium is used in smartphone screens and magnets that need to survive high heat, like in submarines or missiles. The US Department of Defense says it’s “one of the hardest elements to source,” and only makes up a tiny part of most deposits. China ships 85% to Japan, 5% to the US, and the rest mostly goes to South Korea.
Yttrium treats liver cancer, powers medical lasers, and boosts strength in high-temperature superconductors. Though the Mountain Pass Mine in California has produced some yttrium, it’s shipped abroad for separation. From 2019 through 2023, 93% of US yttrium imports came from China.
Dysprosium is built for heat. It’s used in magnets, motors, generators, and nuclear control rods. Its name literally means “hard to get” in Greek. China sends over half to Japan, a tenth to South Korea, and 0.1% to the US. Lynas Rare Earths in Australia says it’ll produce dysprosium and terbium in Malaysia by June.
Gadolinium makes MRI scans better by reacting to magnetic fields. It also strengthens metals against heat and wear. It’s used in electronic components, data storage, and nuclear reactors.
Lutetium is dense and tough. It’s used in oil refining, and nearly all of the US supply comes straight from China, with a little also going to Japan.
Samarium helps make super magnets that can stay magnetic at high temperatures. It’s used in cars, turbines, lasers, and defense systems. It’s also on the US critical metals list for possible stockpiling.
Scandium was discovered in Scandinavia and can come from leftovers from mines or uranium by-products. It’s in baseball bats, bike frames, fighter jets, and even oil pipelines for detecting leaks.
The US hasn’t produced any since the 1970s. It now buys 14% of China’s scandium and yttrium exports, while Japan gets the most. The EU has a new scandium project launching next year.
MP Materials restarted the Mountain Pass mine in the Mojave Desert back in 2018. That’s the only operational rare earth mine in the US with refining power. In the past year, the US produced about 1,130 tons of refined neodymium-praseodymium. That number looks pathetic next to China’s 58,300 tons.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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