This stands for: Light Detection and Ranging - Expensive, but extremely accurate technology, LIDAR is effectively a Laser based version of Radar.
The LIDAR unit, usually sits on top of the vehicle roof to enable unhindered 360 degree view of the area surrounding the vehicle. 64 lasers spin at about 900 rpm and create a detailed 360 degree 3D map of the surrounding environment in order to view all obstacles in real time.
This unit bounces laser beams off object surfaces up to 100m around the autonomous vehicle and then builds a 3D picture from this raw data via the vehicles microprocessor, to accurately determine the identity and distance of the object.
An image taken by LIDAR, showing the road contour, elevation, and vegetation.
Image by Oregon Department of Transportation — Own work.
Licensed under CC BY 2.0, via Flickr Creative Commons.