Horsepower is useless if you can't get it to the pavement. As a result, traction control and differentials are fitted to your car to control how an engine's output is transferred to the road, helping to make the most of whatever power is on tap. This video from Team O'Neil explains how they work.
The differential controls the split of power between wheels on a given axle. Most production cars have an open differential, meaning power can take the path of least resistance. This allows the inside wheel to turn faster when cornering, which helps the car turn.
However, taking the path of least resistance means an open differential will always send power to the wheel with less traction. That means if one wheel loses traction, it will get all of the power, exacerbating the problem, while the other wheel gets zero power.
That makes front- or rear-wheel-drive cars with open differentials effectively one-wheel-drive in such situations. If the wheels are turned, if more weight is shifted to one side of the car, or if one wheel finds a slippery surface, traction is completely lost. In all-wheel-drive cars that send power to the front and rear axles, the wheels on one side of the car may spin while the others get nothing to do.
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This is why many two-wheel-drive performance cars have limited-slip differentials. They still allow one wheel to spin faster than the other for cornering, but can partially lock to send power to the other wheel if one wheel loses traction.
Some four-wheel-drive vehicles go a step further with fully locking diffs, which make the power split between wheels an even 50/50. But having both wheels spin at the same speed doesn't work well for cornering, which is why locking diffs are limited to off-road use.
Differentials are mechanical, but they can be augmented with traction control software. Mandatory on all new passenger cars sold in the United States since 2012, traction control uses wheel-speed sensors to detect loss of grip, and can manipulate the brakes or throttle to send power to a wheel with more grip.
These are just a few of the most common examples. Watch the full video to see how a variety of differential and traction-control combinations work on slippery surfaces.