China’s recent move to grant rare earth export licenses to major U.S. automakers like GM, Ford, and Stellantis—but not Tesla—has raised questions about whether Tesla is being singled out. Here are the key points:

Rare Earth Export Limits: China dominates the global supply of critical heavy rare earth elements (REEs) and has placed restrictions on their export. These curbs are directly impacting Tesla’s production, particularly for its Optimus humanoid robots and electric vehicles, which rely on rare earth magnets.

Effect on Tesla: Elon Musk has acknowledged that China's export limits have disrupted Tesla’s operations, especially in producing the Optimus robot, which depends on high-performance magnets for its motor systems.

Possible Motives: Dr. Gracelin Baskaran of Wells Fargo speculates that China may be targeting Tesla due to Musk’s vocal political views and China's broader aim to boost its own electric vehicle industry.

Global Supply Chain Concerns: The U.S. is heavily dependent on China for rare earths, and the current restrictions have introduced significant uncertainty and potential supply issues for Western manufacturers.

Outlook: Experts warn that supply instability could continue for another 2 to 5 years, as production capabilities outside of China are still being developed. Current solutions are seen as temporary fixes rather than long-term answers.

Recent Updates:

JL MAG Resumes Exports: China has allowed JL MAG Rare-Earth to restart shipments to markets in the U.S., Europe, and Southeast Asia, offering short-term relief for automakers facing shortages.

Trade Talks Ahead: U.S. officials are planning negotiations with China to ease rare earth restrictions, which could help Tesla and other companies navigate the ongoing supply challenges