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Audi's self-driving prototypes will soon be hitting California's roads. Earlier this year, the brand showed an A7 sedan equipped with its prototype "Piloted" system, which can drive the car under certain conditions. Source: Audi.

If you happen to see an Audi cruising on the highway without a driver, don't panic -- as long as you're in California.

Audi announced on Tuesday that it has become the first automaker to receive a permit from the state government to test its self-driving cars on California's public roads.

Audi's permit was issued under state regulations that went into effect the same day. Does this mean the German luxury brand has blown past California's own Google (NASDAQ:GOOG) (NASDAQ:GOOGL) in the race to build a car that can drive itself?

The "race" to build a self-driving car isn't about some future utopia
Yes and no -- but Audi and Google aren't really playing the same game.

For one thing, being first to get a permit to test a self-driving car isn't the same as being the first company to bring one to market.  Audi, which is wholly owned by German auto colossus Volkswagen Group (NASDAQOTH:VLKAY), was also the "first" automaker to sign up in two other states that have passed laws allowing testing of self-driving cars: Nevada and Florida.

It was a minor PR coup for Audi to beat Google to the licensing office in the tech juggernaut's home state. But Audi's self-driving sedans might also well beat the Great Googly One's cars to market. Google's self-driving experiments are a fascinating side venture for a famously smart company, but Audi's efforts are grimly serious.

Audi needs to make advances on the self-driving front, as soon as it can. Not to gain cred with technology geeks, but to keep up with, and hopefully outpace, the competition.

Google's cars are interesting, but Audi is playing a more urgent game
Google's tiny, cute self-driving prototypes are often thought of as the autonomous cars of the future. The implicit promise of the technology is a future in which auto accidents and traffic jams become much less common. The company's advances have been significant, and are worthy of respect.

Goog Self Driving Prototype May

Google's prototype self-driving cars have a unique, endearing look. But the first self-driving cars to hit the market will likely look a lot different. Source: Google.

But the truth is, the first self-driving car to come to market will probably look very different from Google's prototypes -- and much more familiar. Like many of the technological advances that have come to autos in the past, the battle over self-driving cars will initially play out in the high end of the luxury car market. 

In fact, it has already started.

Many automakers have already introduced features that incorporate technology developed as part of the research into self-driving cars. They include systems that help guide you into tight parking spaces, keep you at a set distance from other cars on the highway, and warn you if you're about to hit an unseen object.

Last year, Mercedes-Benz went even further, introducing the first car that really can drive itself -- at least occasionally.

There's already a self-driving car on the market -- sort of
The new-for-2014 Mercedes-Benz S-Class sedan includes a suite of features called "Intelligent Drive." Under certain limited conditions -- stop-and-go highway traffic, for instance -- the Intelligent Drive system can accelerate, brake, and steer for you, up to speeds of 37 mph.

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Mercedes-Benz S-Class sedans equipped with the Intelligent Drive system can drive themselves in limited circumstances. Source: Mercedes-Benz.

It's far from a true self-driving system: The driver still must pay attention and be ready to take over. But it's an impressive feature that no other automaker has yet; in the high-end luxury car market, that matters a lot: U.S. sales of the S-Class are up 107% so far this year.

Audi's self-driving car is about keeping up with the competition
That has all of Mercedes' rivals, and wannabe rivals, scrambling to bring their own self-driving features to market. Earlier this month, General Motors (NYSE:GM) CEO Mary Barra announced that the automaker's "Super Cruise" system -- which is very similar to Mercedes' Intelligent Drive -- will come to market on a 2017 Cadillac.

It's a safe bet that the first model with Super Cruise will be an all-new top-of-the-line Cadillac sedan that is known to be in development. It is expected to be a direct competitor to the S-Class.

It's not just Cadillac. Like Audi, BMW (NASDAQOTH:BAMXF) showed off a self-driving prototype earlier this year, and is widely expected to bring limited self-driving capabilities to some of its models soon. 

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BMW showed off its latest prototype self-driving system, called "ActiveAssist," at the Consumer Electronics Show in Las Vegas earlier this year. Source: BMW.

And Nissan's (NASDAQOTH:NSANY) Infiniti luxury brand -- which, like Cadillac, is moving aggressively to compete head-on with the Germans -- has also promised advanced self-driving capabilities in the near future. Its latest Q50 sedan already includes a feature called "Active Lane Control," which can briefly take control of the car's steering to nudge it back on course if you drift out of your lane on the highway.

Long story short, Audi's latest moves into self-driving technology aren't about showing up the search-engine giant. They're about keeping up with -- and hopefully surpassing, at least in small ways -- the luxury brand's global archrivals.

John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends BMW, Ford, General Motors, Google (A and C shares). The Motley Fool owns shares of Ford, Google (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.