"We believe this will happen in the near future," says Nady Boules, director of the electric and controls integration research lab at General Motors.

Jim Keller, senior manager and engineer at Honda Research and Development, adds, "We see this technology as having huge potential in the future to affect safety."

The DOT's Research and Innovative Technology Administration, which is overseeing the program, released the following statement on the project: "This technology has the potential to be a game changer for safety. Research from NHTSA found that combined, vehicle-to-vehicle and vehicle-to-infrastructure technologies have the potential to address about 80 percent of all unimpaired car crash scenarios."

Joe Stinnett, a research engineer in active safety for Ford, is similarly enthusiastic. He says that, in addition to preventing common accidents, the technology could prevent traffic backups by keeping cars in step with one another. But he says one key area that needs to be addressed is security. "People could hack into the system, sitting on a bridge with their laptop transmitting false information," he warns. So a major challenge will be ensuring that the network is secure and that misbehaviors can be identified, he says.

Europe is on a similar track. In January 2011, the European Commission launched a three-year pan-European field test in seven sites across Europe to ensure the interoperability of the system. The effort includes 40 carmakers as well as suppliers, electronics manufacturers, and research institutes.

As vehicle-to-vehicle communication goes mainstream, it could even pave the way for fully autonomous driving. Google has been testing its own self-driving cars in California. So far those cars have logged 160,000 miles, but they rely on costly sensors. Vehicle-to-vehicle communication could allow for autonomous driving that's far less expensive, Belcher says. He expects that some autonomous driving features could appear in commercial fleets within five years. But he doubts that fully autonomous driving will take hold in the foreseeable future for one key reason: "Americans like to control their own cars," he says.