Jessica Lessin reports Google (GOOG -0.4%), which thus far has focused on developing self-driving systems that could be sold to 3rd-party automakers, is now working on "designing and developing a full-fledged self-driving car," and has held talks with potential contract manufacturers.
In addition to selling these cars to individuals, Google is said to be interested in enabling "robo-taxi" services that can be requested by passengers on-demand. It's worth noting Google just made a $258M investment in Uber.
A German paper has reported (translation) Google is close to a deal with auto parts maker Continental AG (named by Lessin as a possible contract manufacturer) to produce a self-driving system.
One source suggests Google is trying to pressure automakers lukewarm about building self-driving cars to step up their efforts. Google's current test cars (modified Toyota vehicles) reportedly cost $150K apiece.