synopsis

China requires exporters to obtain a license to export rare earth magnets, and the company is working with the country to secure one, the Tesla CEO said.

EV giant Tesla Inc. (TSLA) said on Tuesday that the company is on track to build its Optimus humanoid robot on its pilot production line at its Fremont factory in California this year, but it is not without challenges.

CEO Elon Musk stated on Tuesday during the company's first-quarter earnings call that Optimus production is being impacted by China’s export restrictions on rare earth magnets.

China requires exporters to obtain a license to export rare earth magnets, and the company is working with the country to secure one, the Tesla CEO said.

“China wants some assurances that these are not used for military purposes, which, obviously, they’re not. They’re just going into a humanoid robot. So that’s not a weapon system,” Musk said, as per an earnings call transcript provided by FinChat.

The CEO added that the company is taking “tremendous steps” to localize its supply chain for the robot.

“We’re more localized than any other manufacturer, and we have a lot of things underway to increase the localization, to reduce supply chain risk associated with geopolitical uncertainty,” he said.

Musk envisions thousands of Optimus robots working in Tesla factories by the end of the year and performing “useful” chores around the company’s factories.

The Optimus program is still under development, and most of the production is going to be at the end of the year, he added.

Tesla, on Tuesday, reported a 71% plunge in its first-quarter (Q1) profit to $0.27 per share and a 9% drop in total revenue to $19.34 billion, missing Wall Street estimates by a wide margin.

However, the stock is up by over 7% in pre-market trading on Wednesday. Musk said on Tuesday that he will spend less time in his role in the Trump administration as head of the Department of Government Efficiency (DOGE), aimed at reducing federal spending, starting next month.

The Tesla CEO said he would continue to spend "a day or two per week on government matters for as long as the President would like me to, as long as it is useful."

"But starting next month, I will be allocating far more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done," he added.

On Stocktwits, retail sentiment around Tesla stayed unmoved within ‘neutral’ territory over the past 24 hours while message volume rose from ‘low’ to ‘normal’ levels.

TSLA's Sentiment Meter and Message Volume as of 7:15 a.m. ET on April 23, 2025 | Source: Stocktwits

TSLA stock is down by over 37% so far this year but rose by over 64% over the past 12 months.

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