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Waymo, the autonomous driving unit for Alphabet (GOOGL) - Get Alphabet Inc. Report (GOOG) - Get Alphabet Inc. Report , is considered the leader in the self-driving movement. 

Nvidia (NVDA) - Get NVIDIA Corporation Report has great technology in this department and General Motors (GM) - Get General Motors Company Report , via its Cruise subsidiary, is considered No. 2 in the robo-taxi race behind Waymo. But by and large, the industry considers Waymo the leader, given that it has already commercially launched its (albeit limited) service in Arizona. That leadership isn't all that surprising, considering it was essentially the pioneer of self-driving cars.

But one thing that may come as a surprise? Waymo is now opting to sell its sensors to other companies.

At first glance, that seems like an odd move. It's even more odd when one considers how young the autonomous driving business is and how quickly other companies can catch up. But when we dig through the reasoning a bit, it makes plenty of sense for Waymo.

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Why Waymo Is Selling Sensors

Remember that Waymo is not a hardware provider. That is, unlike a company such as Nvidia, it does not build products to sell to other companies. These types of manufacturers run the risk of "commoditization" or the falling price of the products they are producing.

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In Waymo's case, though, that's exactly what it's hoping for.

Waymo produces sensors for its own vehicles in-house, it's not buying them from a separate company. So provided the buyer won't be a competitor to Waymo's robo-taxi business, they're a possible customer. These sensors, known as lidar sensors, are what Waymo's vehicles use to "see" while they're driving. Lidar sensors are used for more than just autonomous vehicles. For instance, they are used in drones, robotics and agriculture, among other technologies.

According to the company, it's already in talks with dozens of potential customers.

However, it's not the only sensor Waymo uses for its vehicles. In fact, it uses three main sensors and the one for sale is known as the Laser Bear Honeycomb. At present time, it appears that Waymo is not selling the device to automotive suppliers, but didn't rule it out in the future.

At the end of the day, Waymo costs Alphabet plenty of money and while many analysts have pegged Waymo's long-term valuation at well over $100 billion, reducing that negative impact would be beneficial for its parent company. One way to do that is generate revenue on new sales of products it already makes, like sensors, for example.

However, there's a two-fold benefit here. Not only does Waymo hope to generate revenue (and hopefully profit) from its sensor sales, but it's looking for increased volume to lower production costs. While that may drive down its pricing power, the main point is that it can supply its autonomous driving platform at a lower-cost basis.

That's going to be key at scaling its fleet and the timing couldn't be better. 

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.