The US Is Ready to Make a $16 Billion Bet on Driverless Cars

The US Department of Energy wants to get into the autonomous vehicle game.

Image: Wikimedia

Ernest Moniz is wrapping up his first year as Energy Secretary with some intriguing news for autonomous cars: His department is making $16 billion worth of Department of Energy available to companies pursuing driverless vehicle technology.

Moniz was in Detroit meeting with auto suppliers, and told an interviewer that “there was discussion about advanced traffic-management systems (and) autonomous driving,” according to the Detroit News. He said that companies researching driverless cars had become increasingly interested in the Advanced Technology Vehicle Manufacturing loan, which previously had been issued primarily to automakers manufacturing fuel efficient hybrids or electric cars.

But Detroit News reports that the Secretary hinted that "auto suppliers developing driverless-car features could be next in line." And last month, the DOE upgraded the criteria for which auto companies could qualify for loans to include driverless carmakers.

There's a lot of leftover money from the DOE's loan guarantee program, which doles out money to high-risk, high-reward private ventures making big moves in the energy space. The most notable guarantors are probably Tesla, which has repaid its half-billion dollar loan in full and is by all counts a blazing success, and Solyndra, which went bankrupt. That caused Republicans to pile onto the program (and cleantech in general) and pretty much slowed it to a halt.

As such, the DOE hasn't issued such a loan in three years thanks to that backlash—even though, contrary to popular conception, the program has been a success. Solyndra and a few other high-profile cleantech companies failed, but Tesla and others have succeeded beyond expectations—precisely how a loan portfolio works, ideally.

Perhaps the DOE sees driverless cars and traffic management technology as a less-controversial depository for federal funds—both the right and the left are intrigued by driverless car technology, even if few consumers actually want to ride in one. And while driverless technology may seem a bit tangential to the DOE's traditional aims, they do hold the potential to reduce congestion, pollution, and vehicle energy use.

They're more smarter and more efficient—especially if they're electric—than conventional cars. Which companies are petitioning the government for loans is still unknown, but the smart money is on Google—or a more conventional carmaker trying to catch up with Google.

The DOE has not responded to a request for comment; I'll update if I hear more.