The differential is a component in all vehicles and is designed to compensate for the difference in distance the inner wheels and outer wheels travel as the car navigates around a corner.
For example; Let’s say a vehicle is making a right-hand turn, during the turn the inside wheels (closet to the curb) travel a shorter circumference than the outside wheels (driver side), therefore the curb side wheels must rotate at a much slower speed. In vehicles without a differential, such as a kart, both driving wheels are forced to rotate at the same speed. Since opposite wheels travel different distances at the same speed during the turn, a jumping or shuffle effect is caused; similar to that of a 4x4 truck in 4x4 mode turning on dry pavement.
In rear wheel drive vehicles, the differential has its own housing and type of lubrication. Front wheel drive vehicles typically integrate the differential in the transmission housing and share the same fluid.
The two most common differentials are the “open” differential and the LSD or limited slip differential. In the “open” differential design, when one wheel has poor traction (on snow, ice or mud), this greatly limits the amount of power (torque) that gets delivered to the wheel with traction (on pavement) as the torque distribution is always 50/50 in this design. If one wheel takes very little power to turn (the wheel on snow, ice or mud) then the other wheel will receive an equally low amount of torque (the wheel on pavement).
Another common differential is the LSD, limited slip differential. The LSD is designed to prevent limited power from being allocated to the tire with most traction by means of a clutch system. This clutch pack locks both wheels in powered rotation, ensuring that an equal drive force is applied to both wheels regardless of traction abilities of either tire.