The system uses "time of flight" - an approach that gauge distance by measuring the time it takes light projected into a scene to bounce back to a sensor.
The new approach to time-of-flight imaging developed by researchers at Massachusetts Institute of Technology (MIT) in the US increases its depth resolution 1,000-fold.
"As you increase the range, your resolution goes down exponentially. Let's say you have a long-range scenario, and you want your car to detect an object further away so it can make a fast update decision," said Achuta Kadambi, a PhD student at MIT.
At a range of two meters, existing time-of-flight systems have a depth resolution of about a centimetre.
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That is good enough for the assisted-parking and collision-detection systems on today's cars, according to researchers including Rajiv Gupta and Ramesh Raskar from MIT.
At distances of two metres, the new system, by contrast, has a depth resolution of three micrometers.
Kadambi also conducted tests in which he sent a light signal through 500 meters of optical fibre with regularly spaced filters along its length, to simulate the power falloff incurred over longer distances, before feeding it to his system.