High oil prices make business as usual unacceptable, SAE Congress speaker says

  • 13-Apr-2011 10:37 EDT
Ray Lane.jpg

"It's not about returning to [selling] 15 to 17 million new vehicles a year," said Tuesday's SAE Congress keynote speaker Ray Lane of Kleiner Perkins Caufield & Byers. "That's naive."


Drivers are feeling the sting of $100 a barrel oil, but imagine the aftershocks if $300 a barrel oil became reality.

Ray Lane, the featured speaker April 12 at the opening of the SAE 2011 World Congress in Detroit's Cobo Center, said continued cost increases are possible because the U.S., Europe, and Asia are not in control of oil pricing. The Managing Partner of Kleiner Perkins Caufield & Byers (KPCB) said the U.S. is 60% foreign-oil-dependent; by 2020, that will go to 80%, making the country even more susceptible to international oil shocks if the automotive industry "stays with business as usual."

In simplistic terms, Lane believes change needs to happen because the world is changing.

In 1950, there were two cities in the world with more than 10 million people. By 2005, there were 18 world cities of that size. In another 50 years, 400 cities will pass that mark.

And crowded cities mean crowed streets.

If the vast majority of vehicles continue to be powered by internal-combustion engines, there will be "no way back" for the carbon dioxide that gets released into the atmosphere from those vehicles, said Lane, who before joining the venture capitalist firm KPCB was the President and COO of Oracle Corp., a software and services company.

Lane said that an increased use of alternative fuels and alternative vehicle propulsion is happening. In recent months, automakers have announced more than 30 electrified vehicle programs.

"And all of those programs use lithium-ion technology," said Lane, noting that early adopters will provide scale to reduce battery pack integration costs. Current battery pack prices are below $500 per kW·h and are expected to drop to $250 per kW·h. "That can be very beneficial to the industry," he said.

At KPCB, Lane has sponsored several investments for the firm in enterprise, consumer technology, and alternative energy, including GreatPoint Energy (coal to gas conversion) and Fisker Automotive (plug-in electric hybrid cars).

Looking to the future, Lane said that the industry should heed the opportunities that have been sparked by the U.S. economic recession.

"It's not about returning to [selling] 15 to 17 million new vehicles a year," he said. "That's naive. We're in a disruptive industry now. Business as usual is just not acceptable."

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