"It has the potential to be the ultimate game-changer in roadway safety," said National Highway Traffic Safety Administration's David Strickland.
"But we need to understand how to apply the technology in an effective way in the real world."
Drivers will be warned of dangers they might not be able to see to reduce the risk of a collision
Alternatives to the technologies involved in the project are already on the market. For example Bosch offers an ultrasonic sensor which registers objects three metres to a car's side which the drive may not be able to see. Nissan has also introduced a car-mounted radar which monitors the road ahead and applies the brakes if it thinks a collision is imminent.
The US government is attempting to create a superior system which does not rely on the kit being able to "see" a problem - but one expert warned that the innovation's success would be limited until every vehicle was required to have the necessary gear.
"This is a classic case of standards needing to be applied," Prof David Bailey, an automotive expert at Coventry Business School, said.
"There is evidence that consumers are willing to pay for this kind of safety equipment, but to move the market on you might need some kind of regulatory change. So the amount of time it will take before we see it become widespread will depend on both whether the technology is viable and how quickly governments are likely to demand that vehicles implement it. If they don't push hard it could still be 30 to 40 years away."
In Europe Volvo is working on an alternative wireless technology in which cars "follow" a lead vehicle, mimicking its actions and forming a convoy. The technology is designed to be used on motorways allowing the driver to hand over control and relax during part of the journey.
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