Musk doesn't have a timetable for when this radar upgrade could happen, but he believes that it would produce at least "moderate" improvements in Autopilot (if not major ones) without requiring brand new hardware.
Tesla has a strong financial motivation to pursue this strategy, as you might guess. It'd have to spend a lot to add lidar to cars, not the least of which might be significant redesigns to accommodate the sensor tech. If this goes forward, though, it could be a big deal. It still wouldn't make Autopilot foolproof, but it might mitigate (or even eliminate) a key weak point and make the hands-off system that much more trustworthy.
Working on using existing Tesla radar by itself (decoupled from camera) w temporal smoothing to create a coarse point cloud, like lidar— Elon Musk (@elonmusk) July 15, 2016
This article by Jon Fingas originally ran on Engadget, the definitive guide to this connected life.