As Tesla begins its sudden pivot from an EV firm to a robotics and AI company, it's building out the supply chain it will need to reach its lofty goals of affordable humanoid robots that are manufactured at a rapid pace. But the scale of its production ambitions means it will need to rely heavily on the supply of raw materials, components, and manufacturing labor from China, as SCMP reports.
Tesla has a strong standing relationship with China, with its own Shanghai production facility that employs 20,000 people. It also sources many of the batteries for its vehicles from Chinese suppliers, and uses lots of raw materials in vehicle production sourced from China. China is also a major buyer of its vehicles, with over a third of all its sales in 2025 coming from China.
But the United States and China have spent the last year erecting and tearing down trade barriers. From America's side, the economic muscle came from its access to cutting-edge graphics cards and other chips used for AI training and inference. China's strength came from its manufacturing industry and access to raw materials, often termed "rare earths."
Although both are necessary for the AI industry to flourish, the ratio is much more lopsided when it comes to robotics. The "brain" of a humanoid robot will always demand impressive processing power and benefit from advanced AI software; the robots themselves demand an awful lot of critical materials. Many of those materials are mostly found in China.
While Chinese manufacturing and supply dominance affects all industries that produce just about everything, the scale of critical materials and manufacturing know-how necessary for next-generation robotics makes companies like Tesla incredibly dependent on the country.
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Robots are complicated in ways that silicon and semiconductors aren't. Where chips are intricate and minute, and need clean room fabrication and specialized design software to even conceive of how they could be made, robots are decidedly more physical. Sure, they're technically advanced, but they're also made with iron, titanium, nickel, chromium, copper, and manganese. They use actuators, motors, bearings, and lubricants.
In short, they need a lot of stuff to make them, and a lot of that stuff comes primarily from China. Although key materials like Beryllium and Boron have strong supply chains within the U.S., China dominates the global supply of critical materials like Gallium (94%!), Zinc, Neodymium, Molybdenum, Indium, and Praseodymium, to name just a few.
It's not just the raw materials under the ground that's important, though. It's the expertise to extract it, the processing facilities to make it usable, and the logistical infrastructure required to get it where it needs to go.
“With about 50 to 70 per cent of manufacturing and core component production expertise residing in China, we expect Chinese players to take on greater roles in the global humanoid robot supply chain,” said Cheng Xin, a partner at US consultancy Bain & Co. “In some core components … they accounted for at least 55 per cent of the global humanoid robot bill of materials (BOM).”
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