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Tesla’s rise is unmasking Japan’s risk of being left behind

A white Tesla Model 3 in Japan. (Credit: seiji/Twitter)

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Tesla has been one of the automakers that have actually managed to thrive this year despite the pandemic. And as the electric car maker continues its rise, it is becoming pretty clear that legacy automakers who refuse to ride the transition to renewable transport risk getting left behind. This is the case even if the automaker in question is Toyota, the previous Number 1 carmaker by market cap. 

Tesla only sells a fraction of the vehicles sold by Toyota every year, but the electric car maker has a market cap that is around $370 billion now. That’s roughly equivalent to the annual gross domestic product of Hong Kong, and it’s nowhere near reaching its full potential yet. TSLA bulls like Cathie Wood of ARK Invest note that Tesla’s Autopilot tech and data are pretty much ignored for now, and billionaire investor Ron Baron argues that Tesla Energy has as much potential as the company’s EV business. 

Tesla is showing rapid growth across the globe, and this is no more evident than in China, a country that is currently home to the company’s first offshore Gigafactory in Shanghai. Thanks to this, as well as grassroots efforts that make Teslas widely supported by the Chinese government, the company is poised to reap benefits in the country. In Japan, however, things could not be more different. Tesla may have close ties with Japan thanks to its longtime battery partnership with Panasonic and its previous deal with Toyota, but today, the far east country’s mainstream vehicle market remains out of reach for the Silicon Valley-based maker. 

A Tesla Model 3. (Credit: Motor-Fan.jp)

Despite this, William Pesek, an award-winning Tokyo-based journalist and author of “Japanization: What the World Can Learn from Japan’s Lost Decades,” argues that Tesla’s rise across the globe further highlights how Japan’s auto market is still stuck in first gear. In an article on the Nikkei Asian Review, Pesek noted that what Japan is so far missing in the Tesla picture is the fact that Elon Musk does not sell cars. While Japan is still busy focusing on hardware, Tesla is already exploring software, allowing Elon Musk to pretty much sell than iPhone on wheels. This ensures that Tesla is capable of embracing the next generation of motoring. 

“What Toyota long missed about Musk is that he is not selling cars. He is selling an iPhone with wheels. The vehicle itself is merely a medium to market the software undergirding the iTunes-like community that he is building. The data Tesla collects from users, their environs, interests, tendencies, travel habits and the range of behaviors will arguably be more valuable than the engines and high-performance batteries powering them. This enables Tesla to hone the customer experience, while discerning where the market will veer next,” Pesek wrote. 

Tesla Gigafactory Nevada battery cell production line (Photo: Super Factories)
Tesla Gigafactory Nevada battery cell production line (Credit: Super Factories)

Perhaps what Japan really needs right now is to embrace the fact that sometimes, disruption is a necessary evil during times of transition. Strictly speaking, legacy automakers like Toyota should have no problem catching up to Tesla by, say 2025, due to their massive talent pool and resources. This does not seem to be case, however, as carmakers like Toyota have a tendency to focus more on legacy than innovation. Toyota has refined its car making processes through decades of refinements, and its global supply chain helps create millions of jobs. This, while noble in a way, is a weight that a company like Tesla simply does not have. 

Tesla moves fast, fails fast, and innovates fast. The company’s vertical integration allows it to implement changes and improvements as soon as they are ready. Granted, automakers like Toyota could not adopt such changes overnight, but efforts must be done to increase innovation. This is something that Japanese companies are capable of doing, as seen in the continued efforts of Panasonic’s and its longtime battery partnership with Tesla in Gigafactory Nevada. Perhaps companies like Toyota, Nissan, Honda, and the other premier Japanese carmakers could do the same. 

For now, it appears that Elon Musk has already won. So great is the gap in the electric vehicle market that newcomers like Lucid Motors and Rivian Automotive seem to have a better chance at catching Tesla than legacy carmakers. But amidst this threat of being permanently left behind, veterans in the auto market could also see this time as an opportunity to change and raise their electric vehicle game. If there’s anything that Tesla’s rise shows, after all, it is that renewable solutions are the new standard, and they are here to stay. 

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Energy

Taiwan power firm bets big on Tesla Megapacks as AI data center thirst grows

Taiwan’s Apollo Power orders 260 Tesla Megapacks, betting AI data centers will need more electricity.

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Concept render of Tesla Megapack farm supporting an AI Data Center in Taiwan
Concept render of Tesla Megapack farm supporting an AI Data Center in Taiwan

A Taiwanese power company has ordered 260 Tesla Megapack 2XL units, roughly 1GWh of storage, betting that electricity rather than chips will decide how fast AI data centers come online. Apollo Power signed the contract with Tesla’s Taiwan energy arm on October 8, according to the company’s filing with the Taiwan stock exchange.

The filing says the units are meant for behind the meter storage and resilient grid projects, with delivery in batches from the end of 2027 and sites operating in 2028. Apollo and Tesla did not disclose a price, citing a confidentiality agreement. Apollo plans to pay for the equipment through a cash capital increase and bank financing, and it noted the purchase is not revenue and does not mean it holds firm orders from its partners.

Biggo reported that only about 33 units are under signed customer contracts, with roughly 150 more in negotiation. The same report put total project investment near NT$130 billion, but that figure includes installation work, with the equipment itself making up about 40 to 50 percent. In other words, a large share of this order is Apollo reserving supply ahead of demand. Apollo’s chairman told local media global large storage supply is tight, which is why the company locked in the units early, according to Yahoo Taiwan Finance.

Tesla Taiwan partners with Costco to sell vehicles

Apollo also launched an AI data center and grid resilience alliance with Phison, Gigabyte and Shihlin Electric. The pitch rests on a pilot at Phison’s Zhunan plant, where Apollo and Tesla Energy Taiwan installed grid forming Megapack 2XLs in June. Tesla Energy Taiwan general manager Sun Hsiao-Han said the project went from demo to 1GWh in four months, and that Tesla Energy has deployed more than 50GWh worldwide.

Taiwan’s cabinet has approved amendments that would require large energy users to install their own generation and storage, which gives enterprise storage a regulatory tailwind.

The deal fits a pattern Teslarati has tracked. Tesla’s Megablock targets 1GWh commissioned in 20 business days, a pitch aimed squarely at fast moving data center builds. Megapacks already back xAI’s Colossus in Memphis and a 400MW AI campus in Brazil. Sun Media adds that Megapack 2XL was named among the first products in Nvidia’s DSX Ready qualification for battery storage in AI factories.

Deliveries are more than a year away, so the real test is how much of that 260 unit order turns into signed customer contracts.

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Lifestyle

Tesla Cybercab and Robotaxi’s real advantage won’t be the ride service

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Concept art of a Tesla Cybercab in Las Vegas Strip as rendered via Grok

For a century, the car has asked the same thing of its owner, which is basically to pay attention. Even the best ride-hailing app like Uber or Lyft only moved the problem into someone else’s hands. You stopped driving, but you still sat in a stranger’s car, while half listening, and wondering whether to take a phone call in the car without being rude. The Cybercab has no wheel, no pedals and no driver. With Grok @bot now live inside it, it becomes something else entirely, and I think that matters more than the fleet count that everyone is tracking.

Grok @bot is an agent, not a voice assistant. A rider signs in once, and from then on can say what they need and watch it happen. Order dinner from a favorite restaurant. Fill the grocery cart. Move money, answer email, adjust a calendar, push a work project forward. Tesla engineer Yun-Ta Tsai confirmed it is enabled across every Cybercab and the rest of the Model Y fleet, and Tesla’s own pitch is that Full Self-Driving handles the commute while Grok handles the errands.

Think about what that does to a thirty minute ride. Uber sells you a trip, while Waymo sells you the same trip in a more private setting. Tesla is selling the thirty minutes themselves, returned to you with an assistant attached. Errands that used to eat a Saturday get done between pickup and drop off. The ride stops being dead time between two places and becomes a place of its own.

Tesla integrates Grok Bot into its vehicles for the ultimate personal assistant

Best of all, your Bots follow you into any Cybercab, and presumably your own Tesla, then logs you out automatically when you step out. Anyone can bolt a chatbot onto a screen, but much harder to own the vehicle, the autonomy stack and the assistant at once. It also quietly ties SpaceX’s Super Intelligence business to Tesla’s fleet, after Tesla converted its xAI stake into SpaceX equity. The relationship between those two companies is getting harder to describe as separate.

This is also where the hard questions start, because an agent that can spend your money in a vehicle other people also ride in needs some answers. How does it handle a voice it shouldn’t trust? What gets recorded, who can see it, and for how long? What happens when a rider leaves halfway through a task?

If Tesla gets those answers right, the scoreboard changes. We have been counting Cybercabs and wait times. The more telling number may be what riders accomplish per trip. That is data almost no one else will ever have, and it is the real reason to watch Grok @bot.

What do you think? Leave me a comment.

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News

Why Elon Musk’s target date for buying an Optimus robot is harder than it sounds

Musk says China’s magnet export ban cost Optimus months, and robot hands remain shockingly hard.

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Concept rendering of Tesla Optimus in mass production

Elon Musk says China’s export curbs on magnets used in electric motors set back Tesla’s Optimus program by two to three months, and that the robot’s hands remain the hardest part of the project. He made the comments Saturday during a live interview with Tesla Owners Silicon Valley at the X Takeover event at Giga Texas, in front of roughly 2,000 attendees. The Optimus discussion begins around the 49 minute mark of the stream.

On the hands, Musk was blunt and noted that a general purpose humanoid needs fine motor skills that are “incredibly difficult to get right. Shockingly difficult,” he said in the interview. He pointed to a problem he says no one has demonstrated yet: “One of the hardest things also generally is to do precision and force at the same time,” such as driving a small self tapping screw into wood. Touch sensors add another layer, since it is “actually kind of hard to get touch sensors that elastically deform and can handle high cycle life and it won’t just break after a few thousand cycles.”

He also took aim at rival robot videos. “Any complicated looking robot demo, it’s a canned demo. It’s not real,” Musk said, adding that real AI means showing a robot something it has never seen and watching it still cope, the way FSD handles a city it has never driven.

Musk expects the Optimus ramp to be slower than a new vehicle production ramp. “The initial part of that S curve of production ramp is going to be very slow at the beginning,” Musk said, partly because “unlike cars, there’s no pre existing supply chain for robot stuff.” That echoes his July reply on X that Optimus production “will be extremely slow at first, as everything is new.”

The magnet disclosure puts a number on a problem Musk first raised in 2025. He said China “prevented the export of magnets for use in electric motors” and that it “set back the Optimus program by like two or three months.” Then he added: “We had robots with no arms.” Tesla’s fix is to bring the supply chain home. “You’ve got to be able to make all the parts domestically,” he said. Teslarati reported in April 2025 that Musk tied the issue to permanent magnets in the arm actuators, where motors have to be as small as possible.

Tesla Optimus V3 hand and arm details revealed in new patents

Production is moving regardless, with a reported internal goal of more than 1,000 a week by the end of 2026. Teslarati recently covered how Tesla is certifying supply partners in China for Optimus parts, while the company’s hand design has been the subject of new patent filings.

Musk has said he wants Optimus available to the public by late 2027, though Tesla has not confirmed that date or published updated production figures.

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