Google just made a big move to bring down the cost of self-driving cars

Google parent company Alphabet just made a big move to bring its self-driving car tech to market cheaper and faster.

Alphabet-owned company Waymo has slashed the price of lidar, a key component of self-driving cars that helps them see the world, by 90%, Waymo CEO John Krafcik said during a keynote address to kick off the Detroit Auto Show on Sunday.

Lidar is the most expensive component of self-driving cars. As Krafcik noted in his address, a single unit costed $75,000 just a few years ago. A lidar sensor is attached to the top of a car where it spins and shoots out lasers to create high-resolution maps of the car's surroundings.

"Just a few years ago, a single top-of-the-range lidar cost upwards of $75,000. Today, we've brought down that cost by more than 90%," Krafcik said. "As we look to scale, we will do even better, with the goal of making this technology accessible to millions of people."

Waymo is also building all of its self-driving car hardware in-house to ensure that it can scale, Krafcik said.

If Waymo has indeed managed to reduce that top-range lidar cost by more than 90%, the company is looking at a price of roughly $7,500 per sensor. Waymo originally used lidar manufactured by Velodyne in its early prototype cars.

Since its collaboration with Waymo, Velodyne has reduced the price of its lidar to range from $8,000 to $30,000, depending on how many lasers it shoots out. Ford and China-based internet company Baidu have both invested $150 million in Velodyne for their self-driving car efforts.

Google began hiring mechanical engineers to develop "novel lidar systems" in December 2015, marking a departure with Velodyne.

Building self-driving technology to scale

Waymo is making serious moves to bring its self-driving cars to market. Waymo is an independent company operating under Alphabet, Google's parent company, as of December.

The tech giant has also partnered with Fiat Chrysler, which has supplied 100 Pacifica minivans integrated with Waymo's self-driving tech for testing on public roads in Arizona and California later this month.

Waymo has recently changed some of its self-driving car plans in what appears to be an effort to bring the tech to market faster. Waymo originally was pursuing fully driverless cars without a steering wheel, brake, or gas pedals. In December, Waymo said that driver controls will not be removed due to the regulatory environment.

The decision came as Waymo faced setbacks pursuing a steering-wheel-less car and felt mounting pressure from Uber, which has launched public trials for its self-driving cars in recent months.

Waymo has also said it is not in the business of physically building cars, and that it intends to instead supply self-driving tech to other companies. Bringing its hardware efforts in-house instead of outsourcing from Velodyne, as well as reducing the price of components, is in-line with that strategy.

Waymo has said it can see its self-driving tech being used for ride-hailing, personal transportation, public transit systems, and even trucking.

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