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Losing Your Mind Behind the Tesla Powerwall Won’t Hurt TSLA Stock


As another tough day for financial markets draws to a close, You’re here (NASDAQ:TSLA) the stock once again ends up in the red. The electric vehicle (EV) producer has been forced to weather the current storm which has been caused in part by the brewing conflict between Russia and Ukraine.

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Like many of its peers, TSLA stock is struggling today. However, although the company announced bad news, investors should not worry in the long term.

Here’s what investors need to know about Tesla’s future.

What’s going on with TSLA stocks

Today marked the continuation of the losing streak in TSLA stock. Stocks began to fall after markets opened this morning and proved unable to rebound. As of this writing, the stock is down 7% for the day.

That’s not the only recent bad news for the company, however. Specifically, Electrek reports that Tesla Engineering Director Brian Dow is leaving the company to take up a position at Generac (NYSE:GNRC). The company is a leading producer of energy storage solutions.

Still, while that’s not good news for Tesla, it’s also not a reason for investors to panic.

why is it important

It makes sense that a company like Generac would want to poach a leader like Brian Dow. Having worked at Tesla for more than five years, Dow has played a significant role in the company’s recent growth. Tesla is known as a producer of electric vehicles, but it has also established a foothold in the field of energy storage solutions. This is exactly the market in which Generac is a dominant player.

Generac’s primary interest in Dow appears to be a desire to compete with the Powerwall, Tesla’s home energy storage system created to eliminate the standard backup generator. According to Tesla’s website, the device “detects outages and automatically charges with sunlight.”

This type of device gives us a good look at the future of home energy storage. Specifically, it looks sleek and refined and charges using renewable solar energy. Generac is taking clear steps to adapt and not be overtaken by Tesla. However, the company should note that Tesla has the same advantage it brought to the EV race.

What this means for Tesla

People may not think of energy storage when they think of Tesla. When they do, however, they think of the Powerwall. Tesla was the first company to bring such a device to the general public, showing consumers how they could power their homes in the future. Consumers will also likely become more familiar with the Powerwall in the future.

It’s for this reason that even if Generac is able to design its own Powerwall rival soon, it shouldn’t hurt the TSLA stock too much. Competition from EV makers continues to grow, but Tesla remains the most sought-after EV brand as it has shown consumers the future of transportation. Also, energy storage is not Tesla’s primary function as a company. So even if it were to lose substantial market share, stock prices shouldn’t suffer permanent damage.

Most stocks are in trouble right now. However, when geopolitical tensions ease, TSLA stock should return to positive territory.

At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

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