February 27, 2025 • 23 mins
What are the industrial crown jewels of the future? Most of us can name two of them right away: Chips that power the brains behind everything, including AI. And batteries or energy storage systems. Batteries power not only EVs but have a much wider application in delivering energy to factories and countless military applications. There is a third one that might be just as crucial: magnets. Magnets are produced with materials derived from the processing of rare earths. Today, China has an abundance of rare earths. More importantly, China has a near monopoly on the processing of those rare earths. This leaves America and the West highly vulnerable. That's where an American company called Evolution comes in - their mission is to build complete processing capabilities in America for American industry. Joining me today to talk about the rare earth processing and magnet challenge is Dean Evans, co-founder at Evolution. They are already operating in Missouri and have sister companies in Korea. What's the central challenge and how soon will America be able to process rare earths and build its own magnets at scale?
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Episode Transcript
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Speaker 1 (00:02):
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcast.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I'm
your host, Michael Dunn. Now here's a question for you.
What are the industrial crown jewels of the future. Industrial
crown jewels, you know? I bet you could name two
of them right away. One chips semiconductors, the things that
power the brains behind everything, including AI. That'd be one second. One.
(00:36):
Batteries or energy storage systems. Batteries quietly power not only
are electric vehicles, but have a much wider application in
delivering energy to factories and to countless military applications. And
then there's a third one that up until very recently,
no one talked about. It's called magnets. Yeah, magnets are
(00:59):
crucial to so many products. Our smartphones, our computers, our airplanes,
the starter motors in our cars. Magnets are everywhere, millions
of them, and they're produced with materials derived from something
called rare earth. Okay, so far, so good, got it.
Magnets from rare earth? So what Well, today China has
(01:22):
an overabundance of rare earth and More importantly, China has
a near monopoly, a chokehold on the processing of those
rare earths that lead to the manufacture of magnets. So
even if the US is able to secure more rare
earth supply at home or from another country like Ukraine,
all roads still lead to China when it comes to
(01:43):
refining those rare earths. This leaves America and the West
highly vulnerable. No rare earth, no magnets, no real defense
system for your country. That's where an American company called
Evolution comes in their mission build complete processing capabilities in
(02:04):
America for American industry. And joining me today to talk
about the rare earth processing and magnet challenge is Dan Evids,
co founder at Evolution. They're already operating in Missouri and
have sister companies in Korea. What's the challenge and how
soon will America be able to build its own magnets
at scale? Let's find out with Dan Evids on the
(02:25):
Driving with Done podcast. Dan Evans, thank you so much
for joining me today on the Driving with Done podcast.
Speaker 3 (02:40):
You're welcome, thanks for the dialogue today. I'm looking forward
to it.
Speaker 2 (02:43):
This is big time, Dean. You and your colleagues are
pursuing an ultra ambitious goal for the United States and
for American industry writ large. So to start things off
in big picture, how would you describe your mission?
Speaker 4 (02:57):
Yes, it is saving America to also sometimes say it's
strengthening the West, you know, and our security and our
stability moving forward as industrial countries. It's a lot of mouthful,
but it really is helping helping our country more than anything,
and it's more applicable than ever right.
Speaker 3 (03:15):
Now, especially with this current administration.
Speaker 4 (03:17):
Make America great again, I think, is the tagline and
the mission, and so we kind of fit right in
there with what evolution is doing. We have a supply
solution for something called critical materials and minerals or critical
minerals and materials.
Speaker 2 (03:34):
Okay, and really let me jump in right there. So
big picture is critical materials, which are part of a
larger picture of something called an ecosystem around things that
give us energy to do the things we want to do,
whether it's transportation or powering factories of the future. These
(03:55):
the key word is critical materials, right.
Speaker 4 (03:58):
Critical materials, yes, exactly, And I like how you described it.
I also describe it around the fact of if you're
an industrial country today, like a United States, like a Japan,
like a Korea, like in India, you need to really
be doing things like you just said, making mobility, making
(04:18):
things in factories. Well, the fact of the matter is
you can't be an industrial country or a powerhouse unless
you have three critical things chips, batteries, supply, and magnets.
Those three things are like the gas and the engine
of your car. The batteries the fuel, and the magnets
are the motors. And that's what really drives all this
(04:40):
industrial revolution. It has for years, but it's even more
ingrained today because it's even in our iPhones, it's in
our refrigerators, it's in our cars, it's in our military jets.
Speaker 3 (04:50):
And so that's why they're critical.
Speaker 2 (04:51):
That's the reason why they're critical. If I think about
doing an inventory though in the United States today, you
mentioned batteries aside from the gigafactory in Nevada, and when
in Texas, a handful of joint ventures with the Koreans
and Japanese were really light on batteries. If I think
about chips, well, we got some new initiatives with Intel
in Arizona, Samsung, and if I look at magnets, I'm
(05:15):
drawing a blank. Do we even manufacture magnets?
Speaker 3 (05:19):
No?
Speaker 2 (05:21):
So one of the three critical materials we don't make.
Speaker 3 (05:24):
And let me specify.
Speaker 4 (05:26):
There's production and processing of something called rare earth elements
that make the magnets.
Speaker 3 (05:33):
Okay, we invented that, by the way, the United States.
You know who invented that.
Speaker 2 (05:38):
General Motors Get out of here.
Speaker 4 (05:39):
No, but they sold the thing and for you know,
the defense of the folks running GM at the time,
that was a very thing to do from an efficiency standport.
If it wasn't your core competency. Globalization said you can
have someone else do that, and.
Speaker 2 (05:56):
Somebody else do that. What happened when was that?
Speaker 3 (06:00):
Yah, magna flench And it was late eighties, early nineties.
Speaker 4 (06:05):
I have to look exactly or do a search, but
it was over thirty years ago.
Speaker 2 (06:11):
And GMS sold it to where.
Speaker 4 (06:13):
A Chinese conglomerate or a Chinese set of money bags
who said, we'll take that off your hands. Today it's
one of the largest magnet producers in China.
Speaker 2 (06:23):
And GMS had solved the process of taking rare earths
and turning them into these super important things called magnets.
Speaker 4 (06:32):
Yes, and again not to defend them. But magnet usage,
let's say, was twenty things in a car very critical.
Today those are like two hundred things in a car
and five thousand things in your house and et cetera,
et cetera.
Speaker 2 (06:47):
So there, but we don't see them, you know, magnet
as we're sitting here, what what where's a magnet? I
don't see any magnets. Where are they? They're all hidden
inside with the electronic components where they're hiding out everything.
Speaker 4 (07:00):
Like pick up your iPhone or your I should say, smartphone,
there's a magnet in there that when you turn the
camera on and it's focusing, there's little mini magnets in
there that move those lenses, for example. And they're all over.
They're in your TV, they're in all bunch of things.
(07:21):
My favorite is you can't start the car, your car
without it because it's in the starter motor. That's my favorite.
Speaker 2 (07:28):
Wow. So today, where are we getting in America? Where
are we getting our magnets?
Speaker 4 (07:32):
Well, we call our suppliers that make the let's call
it the window regulator motor, and one of our Western
manufacturers calls the supplier and says, I need a million
more of those, And so they just get them, you know,
they just magically appear. The problem is what we are
worried about is next time we call them, they're going
(07:53):
to say they don't sell you that component anymore. Do
you know what they want to sell you instead?
Speaker 3 (07:58):
What the whole car?
Speaker 4 (08:01):
And the last time I checked BYD does that real?
Speaker 2 (08:04):
Well they do. Wow, bigger than.
Speaker 3 (08:07):
A magnet when you can sell us the car?
Speaker 2 (08:09):
Oh my god.
Speaker 3 (08:11):
Oh we don't have.
Speaker 4 (08:11):
Any options because you said at the beginning on the scoreboard.
The scoreboard for magnets is zero.
Speaker 2 (08:16):
Zero for magnets, very thin for batteries. Yes, we have
at least battery packs and we do have a couple
of gigafactories, but we're at least ten years behind China
on the battery front, and then chips similar story us.
It's all concentrated today in Taiwan with TSMC, so we're
way behind on an industrial If the game is you know,
(08:37):
technology and industry, we're.
Speaker 4 (08:40):
I mean, it's the three pillars, battery, chip, magnet, all right,
it's the supply chain can be very complicated and there's
a thousand light items for everyone building things.
Speaker 3 (08:49):
But if you stop the chaos for a.
Speaker 4 (08:51):
Minute and just look through the lens of those three things,
and all of a sudden becomes more clear the urgency.
Speaker 2 (08:57):
So we have a problem to be solved here in
the United We don't have that industrial technology backbone in
our own backyard. We're sourcing it from abroad. This is
where evolution steps in.
Speaker 4 (09:09):
This is where evolution does step in exactly right right
at the heart of all that in the lingo of
the industry what they call that mid stream. I mean,
the other thing that we have to focus on is, yes,
now we've raised we've generated the interest. You know, the
Bided administration had the Inflation Reduction Act. We were like,
(09:30):
you know, critical materials and things like rare earth, that's
not new, that's not abount ten years now five years
within some administrations to start pushing and so we've started
to develop. But there's a there's a little bit of
different perspective evolution takes from the rest of the industry,
which is, we didn't start from a hole in.
Speaker 3 (09:50):
The dirt events.
Speaker 4 (09:53):
We started with who's doing the processing and the magnet production.
Speaker 3 (09:57):
And that's because that's where the choke hold is.
Speaker 4 (09:59):
Yes, I mean today, bless MP Material's heart, thank you
for getting out there, but they still send their output
to China. So you didn't fix the China problem. All
you fixed was Hi, I have a mine in the
United States. Like I said, phenomenal, But you haven't solved
anything yet.
Speaker 3 (10:16):
You've got a good start with.
Speaker 4 (10:18):
The press was the public company with a good partner
like GM, and GM is on it too.
Speaker 3 (10:24):
It's just we're here to also add.
Speaker 4 (10:26):
Now to this narrative that says it's bigger and wider
than that. You need midstream ownership and you need a
whole marketplace of a bunch of companies that can survive
together without any interest in China.
Speaker 3 (10:38):
Whila evolution.
Speaker 2 (10:39):
HM. Just to underline double under that line that point,
all roads when it comes to processing these critical materials,
virtually all roads lead to China. So if it's sourced
in South America, sourced in Africa, sourced from Australia, Indonesia,
the vast majority of those materials still must as through
(11:00):
China for processing and then they might be shipped back
across the Pacific or the Atlantic to the United States
or Europe. Is that accurate? So that that's where China
has us and at any moment they could cut that
off if they wanted.
Speaker 3 (11:14):
To absolutely, And yes there's some magnets laying around. I
mean you've got them in your hardware store.
Speaker 4 (11:19):
But the reality is the volume our big industry uses
in elevators, spacecraft. I mean it's more than the one
on your refrigerator holding up the pictures.
Speaker 3 (11:31):
And so we.
Speaker 4 (11:32):
Have to realize that, Yeah, that is the chokehold of
our country. That's why it's a geopolitical topic. That's why
this new administration is putting their arms around that even
more than the last administration. If not, we think a
more forceful way the tariffs and componentry like that that
(11:53):
says we're going to make it here. I mean, I've
had many people tell me while we've been fundraising over
the last few months, the first.
Speaker 3 (12:00):
Words out of their mouth as, Wow, your timing couldn't
be better.
Speaker 2 (12:03):
You have had enormous interest in government and in the
industry in this initiative. Tell us a little bit more
about the mechanics of what evolution does. So what are
you taking, what are you working on, and what's the output?
Speaker 4 (12:17):
Yes, input is new unique point of view. Instead of mining,
we are recycling. I term it critical recycling because it's
not the two leader coke bottle that you threw out
in the blue dumpster out in front of your house.
That's not very critical. I mean it's great. It's the
green thing. This is beyond green thinking. This is required
(12:40):
reading now because our input is called is from what
we call e wastes and so there's nothing like we
can incinerate it like we are doing today.
Speaker 2 (12:50):
This is all part of a bigger trend that we've
seen the last several years. Where it used to be enough.
Everything was about just in time, you know, efficiency. It
was a world in which there wasn't supply chain shocks
like we experienced in COVID. There weren't the vulnerabilities we're
now aware of. And now it seems that we're shifting
the dial, shifting from just in time to just in case,
(13:13):
just in case of what?
Speaker 4 (13:15):
That's perfect because it forces the alternative question M and
answer solution.
Speaker 2 (13:22):
Are we talking like immediate need or how urgent is this?
Is this something we can take our time or five
years out will be in place or right now?
Speaker 3 (13:32):
Dean, it's not high risk and we're available for sale
and production and output and input today.
Speaker 2 (13:38):
Can you tell us a little bit more about rare earth?
We often read in the papers, China is threatening to
withhold supply of rare earth as if it seems like
they have a monopoly on that. First, is that accurate
that they have monopoly or in their monopoly? And second,
if so, what's the alternatives? Is it a matter of
finding new deposits? Tell us a little bit more about
(13:59):
this rare earth dimension.
Speaker 4 (14:02):
China's making it feel like it's the wild wild West
gold we found gold in them hills. That's not the solution.
It is the processing. But because of those headlines, you know,
let's call it three four years ago, they started kind
of popping up. That's when I really started leaning in.
You know, I was still at Hundai at the time,
(14:23):
and I started reading these headlines about rare earth. And
you know how China has for years basically got themselves
strategically in this really great position. So I think that
at the end of the day, has had now this
new influence around all of us, and rare earths are
these headlines, and so.
Speaker 3 (14:42):
Everyone's like, I got them, and I got them.
Speaker 4 (14:44):
But being more appropriate, again, it's the processing that's really
the problem. Now, if we started hearing fifty people running
around saying I do processing. I do processing that would
make us definitely feel better too, not the only people
in the world outside of China that can do that.
Speaker 3 (15:03):
The point is that's what we need to start.
Speaker 4 (15:05):
Hearing more of to really solve the solution, not more
finding of rare earth. I also think I think China
just announced the other day that they found I don't know,
fifty god zillion billion trillion pounds of it somewhere. Again,
it's like, Okay, the number is that really big? It
was huge? Is it believable? I don't know, but it's
just reminded everybody, or at least me, when I read it.
Speaker 3 (15:27):
It's definitely not the rarer supply that's the problem.
Speaker 2 (15:30):
Mmmm, it's the processing.
Speaker 3 (15:32):
Yeah, it should be called rare processing more than rare earth.
Speaker 2 (15:39):
Hey, what's your differential advantage. I'm I'm rare processing.
Speaker 3 (15:43):
I'm rare processing. Everyone's got the earth.
Speaker 4 (15:46):
Who's gonna mix it up and put in a magnet?
Speaker 3 (15:51):
All right?
Speaker 2 (15:52):
For the less well informed in the world out there
in the world. Because I remind myself Dean that this
is still we're still in the first inning of this
massive transition from fossil fuels to critical materials. So let's review.
Just take an example of batteries. Walk us through the
steps that are required to manufacture a battery so that
(16:15):
we have a sense of just how much of that
is happening outside of the United States and outside of
the West, so that we get to get a handle on, oh,
what are we up against here? Just how much room
do we have to make up? How far behind are we?
So can you just walk us through from the very beginning,
like the minds, to a finished battery what that might
(16:36):
look like.
Speaker 3 (16:37):
Wow, I wish I had a chart in an infograph
for you right now.
Speaker 2 (16:40):
Okay, No, I'm kidding.
Speaker 4 (16:42):
I think the big takeaway there in the framework is
we have more factories in the United States today doing
battery production. You know, there's always been duras Cell, right, yeah,
the ever ready bunny. I mean, we've been selling batteries
and you know what, you know, it's in your car,
your lead acid batteries. So there's this layer of battery
that's not new to us, but definitely the evs and
(17:07):
robots and more automation everywhere has turned the battery into
this bigger thing.
Speaker 3 (17:13):
Like you know, I just drove the other.
Speaker 4 (17:15):
Day a new Cadillac Escalated IQ have you seen the
size of that battery in that thing. I mean, the
point is they're getting that big now, and so that
definitely we all look around and say, as an auto manufacturer,
for example, because they're probably the biggest stakeholder in this
industrial race to keep those three major components you know,
western storest But what's really happening is they're being built now.
(17:39):
Hyundai's got a metaplant and Toyota's just opening up their
battery plant.
Speaker 2 (17:44):
Huge in North Carolina.
Speaker 4 (17:46):
Some fotus question for them all, where is the supply
coming from to make the batteries?
Speaker 3 (17:53):
Because they know what they need.
Speaker 4 (17:54):
They've got suppliers now, they've got joint ventures with a
lot of the Hyundai I'm sorry, with a lot of
the Korean organizations because Korea, definitely, in my opinion, outside
of China, the Koreans really know how to do the electronics,
the batteries, some of this critical componentary more than anyone
because they've been trying to be an industrial powerhouse just
recently over the last two decades. What do you need
(18:17):
those things? They're smart enough to realize that they need
to be core in that supply chain. So they've been
joined venturing in the United States with other folks to say,
let's build batteries. But the same message applies. Who's bringing
you the material and where does it come from? And
then how much of that material can come from recycled
and how much of it is going into the dirt
(18:38):
finding lithium versus pulling it out of the old lithium
battery from the old Nissan leaf for example.
Speaker 2 (18:45):
That's fantastic, just what you described. So you've got your
LGCMS and joint ventures, You've got your sk Innovation, your
Samsung Panasonic is in there too. Yes, so we have
this layer. They even call it the battery belt. In
the United States, one hundred billion dollars has been invested.
But to your point, that's largely like a final assembly
plan for vehicles. Oh yeah, that's where the batteries are.
(19:08):
All everything comes together there. But the hold on, wait
a second. What you're saying is, excuse me, small detail.
Where are those inputs coming from? Where they're not here
in our backyard?
Speaker 4 (19:18):
And I don't and I don't need to show this
vertical of this visual, but I will anyway. Imagine Dean
driving up in his Evolution truck. You can either buy
from me or China. I'm just out front. I have
it in my truck right here, right here. Yes, if
you look at our plans over the next two years,
we have now built an all inclusive campus that now
(19:41):
we produce batteries yes, I'm sorry, Magnets, yes, in Korea,
but we will also be able to do all that
in one location in Fredericktown. Nowhere in the world has
that all come together, obviously, nowhere outside of China, and
never all in one tight package. So we're really excited
about that because then that obviously accelerates our growth.
Speaker 2 (20:02):
Okay, phenomenal, Love this story, love the timing. Wish you
all the very best, and thank you again Dean for
this riveting conversation. We covered a lot. We cover everything
from the defender to Magnets on refrigerator not that one,
to recycling.
Speaker 3 (20:19):
Thank you Michael for taking the time and the interest.
Speaker 4 (20:22):
We appreciate you and your mindset on this too, because
you're an expert in this space and we really appreciate
and enjoy the conversation engagement we've had with you, So
thank you.
Speaker 2 (20:39):
Three takeaways from the conversation with Dean Evans. One Magnets
remind us how much everything related to manufacturing seems today
to be hyper concentrated in China. China produced one third
of all world's manufacturing goods in twenty twenty four. At
the current trajectory, that could go to half by twenty
(21:01):
thirty five. Half Number two Sijiping's grand strategy, that is
to make China less dependent on the rest of the
world and to make the rest of the world more
dependent on China, seems to be working really well for him.
Question at what point will the trend hit a limit?
(21:21):
And three America in the West need more companies like
Evolution that are building national capabilities as we move from
just in time to just in case. Couple three other
quick updates. One, I'm on my way to beautiful Madrid
next week for Faconato, that Spain's mega dealer conference on
(21:42):
five to six March in Madrid. Please join us if
you're in town. Two language the word in Chinese for magnet.
I know you're wondering what it was. I know you
were wondering what it was sa tia or literally to
attract iron tier. There you go. And finally, a quote
(22:02):
of the week from General George S. Patten American World
War two general, he said, nobody ever defended anything successfully.
There is only attack, attack, and attack some more. I
think there's some wisdom in that as we consider the
implications of a world of tariffs. Yes, tariffs do serve
(22:24):
a rule to induce and shape behavior more investment into
the United States. But at the same time, we need
initiatives by companies like Evolution to build stuff by ourselves. Hey,
that is a wrap on the Driving With Done podcast.
Thank you so much for joining. We'll see you next.
Speaker 1 (22:43):
Time where you meet the experts creating the technologies that
will power tomorrow's cars electric autonomous software. To find this
is a Driving with Done podcast. Thank you for joining
this episode of the Driving with Don past. To connect
with Michael Dunn, visit doninsights dot com or find Michael
(23:05):
on x or LinkedIn. This is the Driving Done podcast.
Speaker 3 (23:12):
H
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcast.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I'm
your host, Michael Dunn. Now here's a question for you.
What are the industrial crown jewels of the future. Industrial
crown jewels, you know? I bet you could name two
of them right away. One chips semiconductors, the things that
power the brains behind everything, including AI. That'd be one second. One.
(00:36):
Batteries or energy storage systems. Batteries quietly power not only
are electric vehicles, but have a much wider application in
delivering energy to factories and to countless military applications. And
then there's a third one that up until very recently,
no one talked about. It's called magnets. Yeah, magnets are
(00:59):
crucial to so many products. Our smartphones, our computers, our airplanes,
the starter motors in our cars. Magnets are everywhere, millions
of them, and they're produced with materials derived from something
called rare earth. Okay, so far, so good, got it.
Magnets from rare earth? So what Well, today China has
(01:22):
an overabundance of rare earth and More importantly, China has
a near monopoly, a chokehold on the processing of those
rare earths that lead to the manufacture of magnets. So
even if the US is able to secure more rare
earth supply at home or from another country like Ukraine,
all roads still lead to China when it comes to
(01:43):
refining those rare earths. This leaves America and the West
highly vulnerable. No rare earth, no magnets, no real defense
system for your country. That's where an American company called
Evolution comes in their mission build complete processing capabilities in
(02:04):
America for American industry. And joining me today to talk
about the rare earth processing and magnet challenge is Dan Evids,
co founder at Evolution. They're already operating in Missouri and
have sister companies in Korea. What's the challenge and how
soon will America be able to build its own magnets
at scale? Let's find out with Dan Evids on the
(02:25):
Driving with Done podcast. Dan Evans, thank you so much
for joining me today on the Driving with Done podcast.
Speaker 3 (02:40):
You're welcome, thanks for the dialogue today. I'm looking forward
to it.
Speaker 2 (02:43):
This is big time, Dean. You and your colleagues are
pursuing an ultra ambitious goal for the United States and
for American industry writ large. So to start things off
in big picture, how would you describe your mission?
Speaker 4 (02:57):
Yes, it is saving America to also sometimes say it's
strengthening the West, you know, and our security and our
stability moving forward as industrial countries. It's a lot of mouthful,
but it really is helping helping our country more than anything,
and it's more applicable than ever right.
Speaker 3 (03:15):
Now, especially with this current administration.
Speaker 4 (03:17):
Make America great again, I think, is the tagline and
the mission, and so we kind of fit right in
there with what evolution is doing. We have a supply
solution for something called critical materials and minerals or critical
minerals and materials.
Speaker 2 (03:34):
Okay, and really let me jump in right there. So
big picture is critical materials, which are part of a
larger picture of something called an ecosystem around things that
give us energy to do the things we want to do,
whether it's transportation or powering factories of the future. These
(03:55):
the key word is critical materials, right.
Speaker 4 (03:58):
Critical materials, yes, exactly, And I like how you described it.
I also describe it around the fact of if you're
an industrial country today, like a United States, like a Japan,
like a Korea, like in India, you need to really
be doing things like you just said, making mobility, making
(04:18):
things in factories. Well, the fact of the matter is
you can't be an industrial country or a powerhouse unless
you have three critical things chips, batteries, supply, and magnets.
Those three things are like the gas and the engine
of your car. The batteries the fuel, and the magnets
are the motors. And that's what really drives all this
(04:40):
industrial revolution. It has for years, but it's even more
ingrained today because it's even in our iPhones, it's in
our refrigerators, it's in our cars, it's in our military jets.
Speaker 3 (04:50):
And so that's why they're critical.
Speaker 2 (04:51):
That's the reason why they're critical. If I think about
doing an inventory though in the United States today, you
mentioned batteries aside from the gigafactory in Nevada, and when
in Texas, a handful of joint ventures with the Koreans
and Japanese were really light on batteries. If I think
about chips, well, we got some new initiatives with Intel
in Arizona, Samsung, and if I look at magnets, I'm
(05:15):
drawing a blank. Do we even manufacture magnets?
Speaker 3 (05:19):
No?
Speaker 2 (05:21):
So one of the three critical materials we don't make.
Speaker 3 (05:24):
And let me specify.
Speaker 4 (05:26):
There's production and processing of something called rare earth elements
that make the magnets.
Speaker 3 (05:33):
Okay, we invented that, by the way, the United States.
You know who invented that.
Speaker 2 (05:38):
General Motors Get out of here.
Speaker 4 (05:39):
No, but they sold the thing and for you know,
the defense of the folks running GM at the time,
that was a very thing to do from an efficiency standport.
If it wasn't your core competency. Globalization said you can
have someone else do that, and.
Speaker 2 (05:56):
Somebody else do that. What happened when was that?
Speaker 3 (06:00):
Yah, magna flench And it was late eighties, early nineties.
Speaker 4 (06:05):
I have to look exactly or do a search, but
it was over thirty years ago.
Speaker 2 (06:11):
And GMS sold it to where.
Speaker 4 (06:13):
A Chinese conglomerate or a Chinese set of money bags
who said, we'll take that off your hands. Today it's
one of the largest magnet producers in China.
Speaker 2 (06:23):
And GMS had solved the process of taking rare earths
and turning them into these super important things called magnets.
Speaker 4 (06:32):
Yes, and again not to defend them. But magnet usage,
let's say, was twenty things in a car very critical.
Today those are like two hundred things in a car
and five thousand things in your house and et cetera,
et cetera.
Speaker 2 (06:47):
So there, but we don't see them, you know, magnet
as we're sitting here, what what where's a magnet? I
don't see any magnets. Where are they? They're all hidden
inside with the electronic components where they're hiding out everything.
Speaker 4 (07:00):
Like pick up your iPhone or your I should say, smartphone,
there's a magnet in there that when you turn the
camera on and it's focusing, there's little mini magnets in
there that move those lenses, for example. And they're all over.
They're in your TV, they're in all bunch of things.
(07:21):
My favorite is you can't start the car, your car
without it because it's in the starter motor. That's my favorite.
Speaker 2 (07:28):
Wow. So today, where are we getting in America? Where
are we getting our magnets?
Speaker 4 (07:32):
Well, we call our suppliers that make the let's call
it the window regulator motor, and one of our Western
manufacturers calls the supplier and says, I need a million
more of those, And so they just get them, you know,
they just magically appear. The problem is what we are
worried about is next time we call them, they're going
(07:53):
to say they don't sell you that component anymore. Do
you know what they want to sell you instead?
Speaker 3 (07:58):
What the whole car?
Speaker 4 (08:01):
And the last time I checked BYD does that real?
Speaker 2 (08:04):
Well they do. Wow, bigger than.
Speaker 3 (08:07):
A magnet when you can sell us the car?
Speaker 2 (08:09):
Oh my god.
Speaker 3 (08:11):
Oh we don't have.
Speaker 4 (08:11):
Any options because you said at the beginning on the scoreboard.
The scoreboard for magnets is zero.
Speaker 2 (08:16):
Zero for magnets, very thin for batteries. Yes, we have
at least battery packs and we do have a couple
of gigafactories, but we're at least ten years behind China
on the battery front, and then chips similar story us.
It's all concentrated today in Taiwan with TSMC, so we're
way behind on an industrial If the game is you know,
(08:37):
technology and industry, we're.
Speaker 4 (08:40):
I mean, it's the three pillars, battery, chip, magnet, all right,
it's the supply chain can be very complicated and there's
a thousand light items for everyone building things.
Speaker 3 (08:49):
But if you stop the chaos for a.
Speaker 4 (08:51):
Minute and just look through the lens of those three things,
and all of a sudden becomes more clear the urgency.
Speaker 2 (08:57):
So we have a problem to be solved here in
the United We don't have that industrial technology backbone in
our own backyard. We're sourcing it from abroad. This is
where evolution steps in.
Speaker 4 (09:09):
This is where evolution does step in exactly right right
at the heart of all that in the lingo of
the industry what they call that mid stream. I mean,
the other thing that we have to focus on is, yes,
now we've raised we've generated the interest. You know, the
Bided administration had the Inflation Reduction Act. We were like,
(09:30):
you know, critical materials and things like rare earth, that's
not new, that's not abount ten years now five years
within some administrations to start pushing and so we've started
to develop. But there's a there's a little bit of
different perspective evolution takes from the rest of the industry,
which is, we didn't start from a hole in.
Speaker 3 (09:50):
The dirt events.
Speaker 4 (09:53):
We started with who's doing the processing and the magnet production.
Speaker 3 (09:57):
And that's because that's where the choke hold is.
Speaker 4 (09:59):
Yes, I mean today, bless MP Material's heart, thank you
for getting out there, but they still send their output
to China. So you didn't fix the China problem. All
you fixed was Hi, I have a mine in the
United States. Like I said, phenomenal, But you haven't solved
anything yet.
Speaker 3 (10:16):
You've got a good start with.
Speaker 4 (10:18):
The press was the public company with a good partner
like GM, and GM is on it too.
Speaker 3 (10:24):
It's just we're here to also add.
Speaker 4 (10:26):
Now to this narrative that says it's bigger and wider
than that. You need midstream ownership and you need a
whole marketplace of a bunch of companies that can survive
together without any interest in China.
Speaker 3 (10:38):
Whila evolution.
Speaker 2 (10:39):
HM. Just to underline double under that line that point,
all roads when it comes to processing these critical materials,
virtually all roads lead to China. So if it's sourced
in South America, sourced in Africa, sourced from Australia, Indonesia,
the vast majority of those materials still must as through
(11:00):
China for processing and then they might be shipped back
across the Pacific or the Atlantic to the United States
or Europe. Is that accurate? So that that's where China
has us and at any moment they could cut that
off if they wanted.
Speaker 3 (11:14):
To absolutely, And yes there's some magnets laying around. I
mean you've got them in your hardware store.
Speaker 4 (11:19):
But the reality is the volume our big industry uses
in elevators, spacecraft. I mean it's more than the one
on your refrigerator holding up the pictures.
Speaker 3 (11:31):
And so we.
Speaker 4 (11:32):
Have to realize that, Yeah, that is the chokehold of
our country. That's why it's a geopolitical topic. That's why
this new administration is putting their arms around that even
more than the last administration. If not, we think a
more forceful way the tariffs and componentry like that that
(11:53):
says we're going to make it here. I mean, I've
had many people tell me while we've been fundraising over
the last few months, the first.
Speaker 3 (12:00):
Words out of their mouth as, Wow, your timing couldn't
be better.
Speaker 2 (12:03):
You have had enormous interest in government and in the
industry in this initiative. Tell us a little bit more
about the mechanics of what evolution does. So what are
you taking, what are you working on, and what's the output?
Speaker 4 (12:17):
Yes, input is new unique point of view. Instead of mining,
we are recycling. I term it critical recycling because it's
not the two leader coke bottle that you threw out
in the blue dumpster out in front of your house.
That's not very critical. I mean it's great. It's the
green thing. This is beyond green thinking. This is required
(12:40):
reading now because our input is called is from what
we call e wastes and so there's nothing like we
can incinerate it like we are doing today.
Speaker 2 (12:50):
This is all part of a bigger trend that we've
seen the last several years. Where it used to be enough.
Everything was about just in time, you know, efficiency. It
was a world in which there wasn't supply chain shocks
like we experienced in COVID. There weren't the vulnerabilities we're
now aware of. And now it seems that we're shifting
the dial, shifting from just in time to just in case,
(13:13):
just in case of what?
Speaker 4 (13:15):
That's perfect because it forces the alternative question M and
answer solution.
Speaker 2 (13:22):
Are we talking like immediate need or how urgent is this?
Is this something we can take our time or five
years out will be in place or right now?
Speaker 3 (13:32):
Dean, it's not high risk and we're available for sale
and production and output and input today.
Speaker 2 (13:38):
Can you tell us a little bit more about rare earth?
We often read in the papers, China is threatening to
withhold supply of rare earth as if it seems like
they have a monopoly on that. First, is that accurate
that they have monopoly or in their monopoly? And second,
if so, what's the alternatives? Is it a matter of
finding new deposits? Tell us a little bit more about
(13:59):
this rare earth dimension.
Speaker 4 (14:02):
China's making it feel like it's the wild wild West
gold we found gold in them hills. That's not the solution.
It is the processing. But because of those headlines, you know,
let's call it three four years ago, they started kind
of popping up. That's when I really started leaning in.
You know, I was still at Hundai at the time,
(14:23):
and I started reading these headlines about rare earth. And
you know how China has for years basically got themselves
strategically in this really great position. So I think that
at the end of the day, has had now this
new influence around all of us, and rare earths are
these headlines, and so.
Speaker 3 (14:42):
Everyone's like, I got them, and I got them.
Speaker 4 (14:44):
But being more appropriate, again, it's the processing that's really
the problem. Now, if we started hearing fifty people running
around saying I do processing. I do processing that would
make us definitely feel better too, not the only people
in the world outside of China that can do that.
Speaker 3 (15:03):
The point is that's what we need to start.
Speaker 4 (15:05):
Hearing more of to really solve the solution, not more
finding of rare earth. I also think I think China
just announced the other day that they found I don't know,
fifty god zillion billion trillion pounds of it somewhere. Again,
it's like, Okay, the number is that really big? It
was huge? Is it believable? I don't know, but it's
just reminded everybody, or at least me, when I read it.
Speaker 3 (15:27):
It's definitely not the rarer supply that's the problem.
Speaker 2 (15:30):
Mmmm, it's the processing.
Speaker 3 (15:32):
Yeah, it should be called rare processing more than rare earth.
Speaker 2 (15:39):
Hey, what's your differential advantage. I'm I'm rare processing.
Speaker 3 (15:43):
I'm rare processing. Everyone's got the earth.
Speaker 4 (15:46):
Who's gonna mix it up and put in a magnet?
Speaker 3 (15:51):
All right?
Speaker 2 (15:52):
For the less well informed in the world out there
in the world. Because I remind myself Dean that this
is still we're still in the first inning of this
massive transition from fossil fuels to critical materials. So let's review.
Just take an example of batteries. Walk us through the
steps that are required to manufacture a battery so that
(16:15):
we have a sense of just how much of that
is happening outside of the United States and outside of
the West, so that we get to get a handle on, oh,
what are we up against here? Just how much room
do we have to make up? How far behind are we?
So can you just walk us through from the very beginning,
like the minds, to a finished battery what that might
(16:36):
look like.
Speaker 3 (16:37):
Wow, I wish I had a chart in an infograph
for you right now.
Speaker 2 (16:40):
Okay, No, I'm kidding.
Speaker 4 (16:42):
I think the big takeaway there in the framework is
we have more factories in the United States today doing
battery production. You know, there's always been duras Cell, right, yeah,
the ever ready bunny. I mean, we've been selling batteries
and you know what, you know, it's in your car,
your lead acid batteries. So there's this layer of battery
that's not new to us, but definitely the evs and
(17:07):
robots and more automation everywhere has turned the battery into
this bigger thing.
Speaker 3 (17:13):
Like you know, I just drove the other.
Speaker 4 (17:15):
Day a new Cadillac Escalated IQ have you seen the
size of that battery in that thing. I mean, the
point is they're getting that big now, and so that
definitely we all look around and say, as an auto manufacturer,
for example, because they're probably the biggest stakeholder in this
industrial race to keep those three major components you know,
western storest But what's really happening is they're being built now.
(17:39):
Hyundai's got a metaplant and Toyota's just opening up their
battery plant.
Speaker 2 (17:44):
Huge in North Carolina.
Speaker 4 (17:46):
Some fotus question for them all, where is the supply
coming from to make the batteries?
Speaker 3 (17:53):
Because they know what they need.
Speaker 4 (17:54):
They've got suppliers now, they've got joint ventures with a
lot of the Hyundai I'm sorry, with a lot of
the Korean organizations because Korea, definitely, in my opinion, outside
of China, the Koreans really know how to do the electronics,
the batteries, some of this critical componentary more than anyone
because they've been trying to be an industrial powerhouse just
recently over the last two decades. What do you need
(18:17):
those things? They're smart enough to realize that they need
to be core in that supply chain. So they've been
joined venturing in the United States with other folks to say,
let's build batteries. But the same message applies. Who's bringing
you the material and where does it come from? And
then how much of that material can come from recycled
and how much of it is going into the dirt
(18:38):
finding lithium versus pulling it out of the old lithium
battery from the old Nissan leaf for example.
Speaker 2 (18:45):
That's fantastic, just what you described. So you've got your
LGCMS and joint ventures, You've got your sk Innovation, your
Samsung Panasonic is in there too. Yes, so we have
this layer. They even call it the battery belt. In
the United States, one hundred billion dollars has been invested.
But to your point, that's largely like a final assembly
plan for vehicles. Oh yeah, that's where the batteries are.
(19:08):
All everything comes together there. But the hold on, wait
a second. What you're saying is, excuse me, small detail.
Where are those inputs coming from? Where they're not here
in our backyard?
Speaker 4 (19:18):
And I don't and I don't need to show this
vertical of this visual, but I will anyway. Imagine Dean
driving up in his Evolution truck. You can either buy
from me or China. I'm just out front. I have
it in my truck right here, right here. Yes, if
you look at our plans over the next two years,
we have now built an all inclusive campus that now
(19:41):
we produce batteries yes, I'm sorry, Magnets, yes, in Korea,
but we will also be able to do all that
in one location in Fredericktown. Nowhere in the world has
that all come together, obviously, nowhere outside of China, and
never all in one tight package. So we're really excited
about that because then that obviously accelerates our growth.
Speaker 2 (20:02):
Okay, phenomenal, Love this story, love the timing. Wish you
all the very best, and thank you again Dean for
this riveting conversation. We covered a lot. We cover everything
from the defender to Magnets on refrigerator not that one,
to recycling.
Speaker 3 (20:19):
Thank you Michael for taking the time and the interest.
Speaker 4 (20:22):
We appreciate you and your mindset on this too, because
you're an expert in this space and we really appreciate
and enjoy the conversation engagement we've had with you, So
thank you.
Speaker 2 (20:39):
Three takeaways from the conversation with Dean Evans. One Magnets
remind us how much everything related to manufacturing seems today
to be hyper concentrated in China. China produced one third
of all world's manufacturing goods in twenty twenty four. At
the current trajectory, that could go to half by twenty
(21:01):
thirty five. Half Number two Sijiping's grand strategy, that is
to make China less dependent on the rest of the
world and to make the rest of the world more
dependent on China, seems to be working really well for him.
Question at what point will the trend hit a limit?
(21:21):
And three America in the West need more companies like
Evolution that are building national capabilities as we move from
just in time to just in case. Couple three other
quick updates. One, I'm on my way to beautiful Madrid
next week for Faconato, that Spain's mega dealer conference on
(21:42):
five to six March in Madrid. Please join us if
you're in town. Two language the word in Chinese for magnet.
I know you're wondering what it was. I know you
were wondering what it was sa tia or literally to
attract iron tier. There you go. And finally, a quote
(22:02):
of the week from General George S. Patten American World
War two general, he said, nobody ever defended anything successfully.
There is only attack, attack, and attack some more. I
think there's some wisdom in that as we consider the
implications of a world of tariffs. Yes, tariffs do serve
(22:24):
a rule to induce and shape behavior more investment into
the United States. But at the same time, we need
initiatives by companies like Evolution to build stuff by ourselves. Hey,
that is a wrap on the Driving With Done podcast.
Thank you so much for joining. We'll see you next.
Speaker 1 (22:43):
Time where you meet the experts creating the technologies that
will power tomorrow's cars electric autonomous software. To find this
is a Driving with Done podcast. Thank you for joining
this episode of the Driving with Don past. To connect
with Michael Dunn, visit doninsights dot com or find Michael
(23:05):
on x or LinkedIn. This is the Driving Done podcast.
Speaker 3 (23:12):
H
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