US-China trade war affects Elon Musk’s robots

ISTANBUL

Tesla CEO Elon Musk has said China's rare earth element (REE) restrictions on the US as part of the Washington-Beijing trade war are affecting his company's robot production.

Tesla’s net profits in the first quarter dropped 71%, according to CNBC, with Musk saying trade wars have hampered the company's ability to produce Optimus humanoid robots.

Musk said on Wednesday that Tesla is working with Beijing to secure access to key resources, noting that the Optimus robots are critical to the company's future, and denied allegations that his requests are related to military production.

Musk noted that the autonomous robots will be used in Tesla production facilities.

The Optimus robot prototype was unveiled in 2022, and Musk announced in 2024 that the company would begin using humanoid robots the following year.

Tesla’s financial results showed a 71% decline in January-March 2025, citing uncertainties in the auto and energy markets and rapidly changing trade policies.

Tesla has been subject to protests and boycotts due to Musk’s actions.

The world’s richest man supported President Donald Trump’s election campaign, and he was appointed to lead the US Department of Government Efficiency (DOGE). Musk’s strategy to reduce costs involved the layoff of thousands of federal employees.

Protests were held outside of Tesla dealerships across the country, with police making arrests. Trump showed support for his senior advisor by appearing before and purchasing Tesla EVs.

However, since Trump’s victory in November 2024, Tesla’s popularity has waned. The company’s shares lost most of the gains that Trump’s win brought, falling 41% since the beginning of the year.

Musk said he would reduce the time he spends on DOGE and allocate a day or two a week to government matters, so long as Trump wishes him to, noting that he wants to focus on the challenges Tesla is facing now.