Editor’s Note: Rahul Kapoor is a professor of Management at the Wharton School of the University of Pennsylvania. In his research, Rahul focuses on the management of industry disruption and business ecosystems from a perspective of both established and emerging firms, and is currently using forecasting tournaments to study disruption in the automotive industry. The opinions expressed in this commentary are his own.

What a difference a year makes. It was just last spring that Tesla CEO Elon Musk was facing calls to step aside amidst a series of controversial tweets and unforced errors, and many questioned the company’s long-term viability. But Tesla has managed to survive against immense odds and become a blueprint for the entire automotive industry. Now, it is the most valuable automaker in the world, with a market value that has increased six-fold since last year. And Musk has firmly cemented himself as the de facto face of the transformation of the automotive industry.

How this fairytale will evolve is still an open question, and its answer will likely depend much more on what its established rivals will do as they attempt to buffer Tesla’s impact on their businesses.

Tesla’s rise has been anything but smooth sailing. And today there are good reasons to question whether Tesla, as an enterprise, should be valued at more than the combined values of Ford, GM, Fiat Chrysler, BMW, Daimler, and, yes, the Volkswagen Group (that includes Audi, Porsche, Lamborghini, Bentley and Bugatti). Its sales, profits and R&D budgets are truly microscopic compared to its established rivals.

However, with every passing month, Tesla is cementing itself as a technology leader and enhancing its brand, and major automakers are leaving the doors open for their core customers to be enticed by the Tesla value proposition. Within a year, Tesla has expanded its global footprint by establishing a new manufacturing base (aka Gigafactory) in Shanghai, China and is in the midst of adding another in Germany and in the United States; it commenced deliveries of the Model Y, the new mid-size SUV; unveiled the new electric pickup Cybertruck that pulled science fiction into reality; and has pushed forward with its plans for manufacturing the electric semi-truck.

Despite all these investments, its limited scale, recent price cuts to boost sales and of course dealing with the global pandemic, Tesla has started to show glimpses of profitability.

What Tesla and Musk have achieved in the past year is clearly worthy of celebration, and an affirmation of what a risky yet persistent strategy can deliver based on both sensing the evolving trends and shaping the ecosystem.

But the transformation of the automotive industry is still in an early stage of development, with electric cars constituting less than 3% of new car sales and the prominence of fully autonomous driving many years away. While the last 10 years have been about what Tesla could do to keep its rise going, the next 10 years will be much more about what its established rivals can do to sustain themselves in a changing landscape. Will they be able to adapt their capabilities and business models, and leverage their brands and scale to generate a compelling value proposition for their customers? This would be along the lines of what Microsoft has so successfully done with the transition to cloud or what Nestle did with the transition to premium coffee. Or will they continue to hold back and pursue piecemeal strategies that are more reminiscent of what Kodak did with digital photography or Nokia with smartphones?

Every major automaker has been working on developing electric vehicles and self-driving technology, with a myriad of new car models and features launching in the coming months and years. The key for these automakers will be to try and change the rules of the game that Tesla is playing by. That means following a strategy that’s not only premised on catching up with respect to battery and self-driving technology, but also easing their existing customers into adopting these new vehicles. This would result in significant short-term costs and loss of profits, but would give the established players an option to leverage their brands and customer base to be successful in the long term.

Tesla can extend its lead by continuing to push the envelope as a technology leader. While its advantage in battery technology is likely to be constrained by laws of chemistry, its efforts toward fully autonomous cars may help sustain its technology leadership.

Waymo, the autonomous driving unit of Google’s parent Alphabet, could drastically alter the balance between Tesla and its established rivals. It seems to have the will and capabilities to become a dominant player in the autonomous driving domain, and it’s already partnering with several established automakers to develop autonomous vehicles. Just as what Google did with Android — giving smartphone manufacturers a lifeline with a free open-source operating system to compete against Apple — it could play the same card by providing established automakers with an “Autonomous Android” operating system to power their self-driving vehicles, and create a much bigger network than Tesla’s. Or perhaps Musk could get ahead of that possibility by bringing the best of electrification and autonomy together through a Tesla-Waymo strategic partnership or even an outright acquisition.

Tesla has had an amazing run over the past year. While the events of the past have eliminated most doubts regarding its long-term viability, the events of next year will help define the competitive field that Tesla is more likely to play in. Musk has been at it for almost 20 years and has a lot to celebrate. But the game is still in its first quarter — there is a long way to go and a lot to play for.