Tesla has a China problem with their humanoid robots. Lots of them.

by Inside China Business [3-12-2026].

Tesla is shifting focus in the US market from Electric Vehicles, to the production of humanoid robots.

The company is repurposing a plant in Fremont, California to the manufacture of Optimus humanoids, instead of EV's.

Supply chains for humanoids run through China, and Tesla is meeting with hundreds of suppliers in China to build an "Optimus Chain" of components, which will be then exported to Fremont for final assembly, and sale to American factories.

Were Tesla to do the R&D and component manufacturing in-house, their total costs would soar, to over $130,000 per unit.

Chinese humanoid companies, such as Unitree, are already in mass production, and sell units at retail prices that are far below Tesla's expected costs, after Fremont is online.

Closing scene, Hangzhou

Resources

China supply chain dominance clouds Elon Musk’s bid to build Optimus humanoid robots [2-3-2026]

Tesla CEO Elon Musk hopes to bring back production of its humanoid robot, Optimus, to the US. The carmaker recently announced plans to repurpose its EV factory in Fremont for manufacturing humanoids, aiming to produce 1 million Optimus units annually.

However, Tesla faces a critical roadblock in attempting this shift in production, as most of Optimus’s components are made in China. According to Morgan Stanley, excluding Chinese components from the Optimus Gen 2 supply chain could raise total costs to $131,000 from $46,000.

For Musk and co., that represents a major challenge given their aim to reduce Optimus’s cost to around $20,000. China, on the other hand, sells robots like the Unitree G1 for $16,000 per unit, leveraging its robust manufacturing infrastructure.

Tesla's Optimus Can't Be Made Without Chinese Components [2-3-2026]

‘Optimus chain’: Chinese suppliers form the backbone of Tesla’s humanoid robot initiative [2-1-2026]

Humanoids: A $5 Trillion Market [5-14-2025]

Unitree showcases 49 humanoid robots performing synchronized martial arts demo at Temple of Heaven after Spring Festival Gala show [2-21-2026] Chinese humanoid robot company Unitree released a video on its official WeChat account on Monday, showing 49 G1 humanoid robots performing a synchronized martial arts demonstration in front of the Hall of Prayer for Good Harvests at the Temple of Heaven in Beijing.

Orders for robots surge after China’s Spring Festival Gala [2-23-2026]