This paper reviews current developments and discusses some critical issues with obstacle detection systems for automated vehicles. The concept of autonomous driving is the driver towards future mobility. Obstacle detection systems play a crucial role in implementing and deploying autonomous driving on our roads and city streets. The current review looks at technology and existing systems for obstacle detection. Specifically, we look at the performance of LIDAR, RADAR, vision cameras, ultrasonic sensors, and IR and review their capabilities and behaviour in a number of different situations: during daytime, at night, in extreme weather conditions, in urban areas, in the presence of smooths surfaces, in situations where emergency service vehicles need to be detected and recognised, and in situations where potholes need to be observed and measured. It is suggested that combining different technologies for obstacle detection gives a more accurate representation of the driving environment. In particular, when looking at technological solutions for obstacle detection in extreme weather conditions (rain, snow, fog), and in some specific situations in urban areas (shadows, reflections, potholes, insufficient illumination), although already quite advanced, the current developments appear to be not sophisticated enough to guarantee 100% precision and accuracy, hence further valiant effort is needed.