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Tesla’s rise is unmasking Japan’s risk of being left behind
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.
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.
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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Elon Musk told The Economist that artificial intelligence will likely surpass the combined intelligence of every human on Earth within about five years, and that humans may not remain in charge once that happens. In a wide-ranging interview with editor-in-chief Zanny Minton Beddoes, recorded at Giga Texas for the outlet’s Insider series, Musk compared the widening gap between AI and human intelligence to the gap between humans and chimpanzees.
“It’s hard to imagine that the chimpanzee would be in charge,” he said, addressing what happens to human authority once AI moves far beyond us.
Elon Musk reiterates his most optimistic prediction yet with “UHI” forecast
Musk’s timeline stretches out from there. Five years for AI to out-think humanity combined, ten years before humans lose meaningful control, and by 2036, he says, money itself may stop mattering.
Musk notes that if robots and AI produce more goods and services than people could ever consume, currency loses its purpose. He told Beddoes that governments could respond with direct payments, what he called “universal high income,” a term he first used in an X post last August describing a future where “everyone will have the best medical care, food, home, transport and everything else.”
There will be universal high income (not merely basic income).
Everyone will have the best medical care, food, home, transport and everything else.
Sustainable abundance.
— Elon Musk (@elonmusk) August 24, 2025
He also floated a more surprising prediction that deflation, and not inflation, would become the bigger economic problem, since expanding the supply of goods and services faster than the money supply grows would push prices down rather than up.
None of this is new territory for Musk, who has spent years describing an “age of abundance” built on Optimus and autonomous vehicles. What’s notable is the timing. The interview landed the same week Tesla shares dropped roughly 19 percent following a second quarter earnings report that beat on revenue but missed badly on profit, and as SpaceX stock continues to slide from its post-IPO peak.
Musk’s own net worth has fallen close to $700 billion since mid-June, according to the Bloomberg Billionaires Index, even as he describes a future where personal wealth stops being the point.
Musk did not dodge the risk side of the equation either. He put the odds of AI contributing to human extinction somewhere in the 10 to 20 percent range, then arrived at what he called his “philosophical conclusion” since the technology cannot realistically be stopped and the arguably better response is to keep building it and hope the outcome leans toward abundance rather than catastrophe. “I’ve gone from exhilaration to terror regarding AI,” he told Beddoes, “even intraday.”
Tesla is adding a new “Traction Control Modes” feature to its cars for better handling in any conditions. These features will roll out to the Model 3 and Model Y, the two vehicles in Tesla’s lineup that typically do not have drive modes for various conditions.
Tesla did include this in the Model S and Model X, as well as the Cybertruck.
The new feature will roll out with the 2026 Summer Update, which Tesla announced last week and subsequently started rolling out to some owners today. The Summer Update is the latest iteration of the usual four seasonal releases the company rolls out throughout the year. These releases typically feature some owner-requested features, as well as improvements to things like the Full Self-Driving suite.
Tesla reveals 2026 Summer Update with crazy fixes to Nav and more
This release is no different. Among the changes are improvements to Navigation, new customization options with wraps and how they can be shared and stored, more functionality with the Tesla smartphone app, and new gamification with self-driving.
However, Tesla announced today that it was adding another feature to the Summer Update. Traction Control Modes will now be available with the release
Tesla describes them:
“Choose from three updated Traction Control Modes: Auto for normal driving conditions, Slippery Surface for icy or wet roads, Stuck Assist when stuck in snow, mud, or sand. The mode resets to Auto at the start of each drive. To select, go to Controls > Dynamics > Traction Control Mode.”
Tesla’s 2026 Summer Update also includes new Traction Control Modes
📸: @PatchesHQ https://t.co/N9cD2lGP14 pic.twitter.com/ogLC5ROIgc
— TESLARATI (@Teslarati) July 26, 2026
The use of these modes will help improve a Tesla’s overall performance in less-than-ideal conditions. Typically, these traction control modes monitor wheel speed through sensors and track engine power to adjust responsiveness in various conditions.
These drive modes are not an ultimate solution to all driving conditions; just because there is a “Stuck Assist,” doesn’t mean your Tesla will dig itself out of a foot-and-a-half trench during a blizzard. It is important to remember that some of these scenarios also require some assistance from the driver. For example, driving in sand requires tires to be aired down significantly to increase traction and control.
However, this will be a welcome addition for those who use the Full Self-Driving suite and might not be convinced of its performance in adverse conditions. Some of us prefer to be in control in rain, snow, or ice, which is totally understandable. However, adjusting the Traction Control Mode while utilizing FSD in snow, rain, or ice could increase confidence and overall experience.
Tesla’s Summer Update is already rolling out to some owners, so it should be making its way to most of the fleet over the next several weeks. The Spring Update rolled out at a very conservative pace, so if you don’t have it by the end of August, don’t be too upset. It might just be Tesla’s method.
Just hours after Starship Flight 13 achieved a successful soft splashdown of its upper stage in the Indian Ocean on July 24, Elon Musk announced an ambitious next step for the company’s next launch of the rocket.
“Unless we discover problems after mission data review, SpaceX will attempt to catch the ship with the tower on [the] next flight,” the SpaceX CEO posted on X on Friday.
That “next flight” is expected to be Flight 14. The plan involves returning the Starship upper stage, commonly called the “ship,” to the Starbase launch tower in Texas and catching it mid-air using the same mechanical “chopsticks” arms that have already proven themselves with the Super Heavy booster.
Unless we discover problems after mission data review, SpaceX will attempt to catch the ship with the tower on next flight
— Elon Musk (@elonmusk) July 25, 2026
A successful catch would mark the first time an orbital-class upper stage has been recovered this way, advancing SpaceX’s goal of full and rapid reusability for the entire vehicle.
SpaceX has already demonstrated the tower-catch technique multiple times with Super Heavy. The first successful catch came on Flight 5 in October 2024, when Booster 12 was plucked from the sky by the Mechazilla arms. Subsequent flights, including those involving Boosters 14 and 15, repeated the feat. Several of those recovered boosters were later inspected, refurbished, and flown again, proving the system’s viability for quick turnaround.
Traditional reusable rockets, such as SpaceX’s own Falcon 9 or Blue Origin’s New Shepard, land on legs either on land or droneships. Rocket Lab has recovered its small Electron first stages by helicopter, but those are far lighter vehicles.
SpaceX Starship just nailed something it’s never done before
The China Academy of Launch Vehicle Technology (CALT), a subsidiary of the China Aerospace Science and Technology Corp. (CASC), completed a catch of its booster on July 10. They are the only entity besides SpaceX to attempt and complete the feat.
Flight 13 provided encouraging data. The ship executed a controlled reentry, flipped, and soft-landed intact in the ocean after deploying Starlink satellites, offering the first clear post-splashdown views of an undamaged heat shield. The Super Heavy booster, meanwhile, experienced a harder splashdown in the Gulf of Mexico.
Musk has previously stressed that ship catches would only follow multiple successful soft ocean landings to minimize risk of debris over land.
If Flight 14 succeeds, SpaceX would take a major stride toward routine, rapid reuse of both stages—critical for lowering launch costs and supporting ambitious plans for lunar and Mars missions. For now, teams are reviewing the Flight 13 data. Should everything check out, the next Starship flight could deliver one of the most spectacular recoveries in aerospace history.
Elon Musk explains what happens when AI outsmarts all of us
Tesla adds new ‘Traction Control Modes’ for better handling in any conditions
