(I'd love to know what your wife thinks of the design and / or their design process. How capable is Google at designing cars?)

They're rich enough to poach designers from established companies, or to hire new grads. There are only three major schools in the US that train car designers, and most car designers come from one of them, or from one of the handfull of others in UK, France, Korea or Japan. So my guess is they could figure it out.

But as to which option Google will choose, I think it most certainly won't be option one. Take total employment, as an example. Google employs about 47,000 people, if Wikipedia is to be trusted. GM alone employs 205,000 people directly, with hundreds of thousands of others working for suppliers needed to support their manufacturing operations. GM's domestic market share is 18%, with their world market share at about 11%, according to the most recent figures I could find. Do the simple math to extrapolate the total global automotive workforce. It's staggering. Unless Google is planning to increase it's workforce by two orders of magnitude (in a wholly different industry than the one in which they have expertise), they aren't really in a position to dominate anyone, are they? Any asshole with some knowledge, money, and time can make a prototype. Only a mega manufacturing company can make safe, affordable, attractive, mass production vehicles. So yeah, option two or three are the only real options, but really option three is the only logical one, unless Google really wants to get into the auto business, which I'm sure they don't (that $11 billion is chump change compared to what a major auto company is worth; even if their market cap is lower, one needs to value assets to assess a sale price, and all the factories and capital equipment of a major player adds up to a boatload of cash). (And yes, I used to hang out at a bar on Selden street in Detroit when I lived a block away--everything here is named after auto company men.)