Alphabet Waymo says it has cut the cost of crucial self-driving car technology by 90 percent

If self-driving cars are going to become the norm, they are going to have to get cheaper to produce. Waymo, the self-driving initiative recently spun out of Google, says it has already made a bunch of progress on that front.

The company has slashed the cost to produce Lidar sensors, the radar-like systems crucial to many driverless car efforts, by 90 percent over the last several years, Waymo CEO John Krafcik said in a presentation at the Automobili-D conference in Detroit on Sunday.

One key to bringing the cost down from an off-the-shelf price of about $75,000 in 2009: Building the technology in-house.

In addition to software, Waymo is also designing all of the hardware in its systems inside of Waymo. That includes two new types of Lidar sensors in addition to the mid-range ones its had from the start. They are short-range sensors, to detect objects in the immediate vicinity of the vehicle, and long-range ones to detect potential obstacles from afar.

In the long run, the nuts and bolts of how autonomous technology works won't be the way car companies differentiate themselves. But in these early years of the industry, building a better suite of sensors and hardware can be key to securing the right partners.

While Waymo is building both self-driving software and hardware, it is not building actual cars. Instead, the company has partnered with Chrysler to outfit 100 Pacifica minivans with self-driving technology and has been in talks with Honda too. The Chrysler vehicles are scheduled to hit the road later this month in both Arizona and California, Krafcik said on Sunday.