Tesla's robotics ambitions rest on the knife-edge of US-China trade relations due to its supply chain — the majority of critical materials and suppliers are located in China

Tesla's shift towards robotics and AI is heavily reliant on its supply chain, with many critical materials and suppliers located in China. The US-China trade relations play a crucial role in Tesla's ambitions, as China dominates the global supply of key materials needed for next-generation robotics. China's control over the supply chain puts Tesla at risk, as demonstrated by a Chinese block on exporting rare-earth magnets impacting the production of the Tesla Optimus robot. The US government is aware of the dependency on Chinese materials and is working on developing a stockpile to mitigate risks. However, China's advancements in humanoid robotics and its control over key technologies and materials give it a significant advantage over Western companies like Tesla.