As another difficult day for financial markets winds to a close, Tesla (NASDAQ:TSLA) stock is finishing in the red yet again. 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.
Like many of its peers, TSLA stock has been struggling today. However, although the company announced some bad news, investors shouldn’t be concerned in the long run.
Here’s what investors should know about Tesla moving forward.
What’s Happening with TSLA Stock
Today marked a continuation of TSLA stock’s losing streak. Shares began falling after markets opened this morning and proved unable to rebound. As of this writing, the stock is down 7% for the day.
That isn’t the only recent bad news for the company, though. Specifically, Electrek reports that Brian Dow, Tesla’s Director of Engineering, is leaving the company to take a position at Generac (NYSE:GNRC). The company is a leading producer of energy storage solutions.
Still, while this isn’t great news for Tesla, it also isn’t a reason for investors to panic.
Why It Matters
It makes sense that a company like Generac would want to poach a leader like Brian Dow. Having been at Tesla for more than five years, Dow has played a significant role in the company’s recent growth. Tesla is known as an EV producer, but it has also been gaining 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 seems to lie in a desire to rival 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 recharges with sunlight.”
This type of device gives us a good look into the future of home energy storage. Specifically, it looks sleek and refined and recharges using renewable solar energy. Generac is making clear moves to adapt and not be outdone by Tesla. However, the company should note that Tesla has the same advantage it brought to the EV race.
What It Means for Tesla
People may not think of energy storage when they think of Tesla. When they do, though, they think of the Powerwall. Tesla was the first company to bring such a device into the mainstream, showing consumers how they could power their homes in the future. Consumers will likely also be most familiar with the Powerwall moving forward.
It’s for this reason that, even if Generac is able to engineer their own rival to the Powerwall soon, it shouldn’t harm TSLA stock too much. Competition from EV producers is increasing all the time, but Tesla remains the most searched EV brand because it showed consumers the future of transportation. Plus, energy storage isn’t Tesla’s primary function as a company. So, even if it did lose a substantial piece of market share, stock prices shouldn’t suffer any permanent damage.
Most stocks are struggling right now. However, when geopolitical tensions ease, TSLA stock should pull back into the green.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.