automating logistics lines does have military potential -- a waymo doesn't have to be holding bob and sara on the way to mcdonalds, it could also be long-hauling thousands of pounds of troop equipment and logistics needs.
the lack of public funding towards automated cars isn't due to a lack of potential, it's due to a lack of focus and lower-hanging-fruit.
After the DARPA Urban Challenge of 2007 I naively thought that commercial self driving urban vehicles were about 5 years away. It actually took until 2020 for Waymo to offer services to the public, and just in one city to start:
That's a long timeline from "tech demo" to usable technology. I don't know how to maintain government funding for that long in a democratic system. No president, senator, or representative goes that long without fighting for re-election. Any technology that still isn't working after 12 years is likely to be considered a dead end and canceled. The big impressive government projects of the 20th century delivered results faster; there were only 7 years between Kennedy's "We choose to go to the moon" speech and NASA actually landing on the moon.
Companies with large resources can behave more like "planned economies" that aren't subject to short term whims of the electorate. Of course they can also exhibit even more short-term orientation -- the notorious "next quarter's earnings report" planning horizon.
the lack of public funding towards automated cars isn't due to a lack of potential, it's due to a lack of focus and lower-hanging-fruit.