I think Tesla has leapfrogged ahead of Google, because of the shift to machine learning, the company with the most data wins... and Tesla is getting A LOT more data than Google... and accumulating more and more each day. Google's only shot now is to license their tech to car companies that already have sensors on the road in their vehicles, and Elon mentioned this is what he thinks they'll do...
Yes, this *may* be true.. but from what I've researched about Google, they're already nearly there. I'd say 90% baked. But yes, their main issue is they never took the leap into production like Tesla has.
I think they're more than happy with possessing and licensing the software end of it to ride sharing companies like lyft and uber, but it will take quite a while for regulations to allow these cars to drive themselves around without a driver inside.
I'd be very curious to know if they have any plans to license direct to car manufacturers, along with their hardware...that would make more sense since the driver would need to be present and alert, etc. I could see it now -
"The all-new 2018 fully electric Chevy Ohm, featuring Android Auto with voice activated control and Google Autopilot."