Tesla has ‘very significant’ technological lead, says trust

US electric vehicle pioneer Tesla has been hailed as an “exceptional company” with a “maverick leader” by managers of the £3.3 billion Monks Investment Trust.

Tesla, which is run by Elon Musk, was the most significant contributor to Monks’ performance in the year to April 30. The trust yesterday reported a total return on net asset value of 55.5 per cent for the year to April. This was well ahead of a total return of 33.9% on the FTSE World Index in sterling terms.

Monks manager Spencer Adair and deputy manager Malcolm Maccoll, of Edinburgh investment house Baillie Gifford, flag a huge rise in Tesla’s production capacity and the company’s solar power and self-driving vehicle technology.

They say in their report on the year: “Tesla is an exceptional company with a maverick leader. It was the most significant contributor to 12-month performance as it continued its march to dominance in the automobile world. Despite factory shutdowns during the pandemic, the company increased production by over 30% to 500,000 vehicles. It will soon have capacity to manufacture 1.5 million vehicles in California, Berlin and Shanghai and it is building a plant in Texas that will be the main production location for the Tesla Semi (truck) and Cybertruck (pickup).

“Whilst traditional auto makers are now producing electric vehicles at scale, we think Tesla’s technology lead is very significant and there are interesting options around solar power and autonomous driving where Tesla also has a leading edge.”

Assessing results for the year to April, Mr Adair and Mr Maccoll noted shares in Tesla and in Sea Limited, a gaming, ecommerce and payments company operating in southeast Asia, had risen four-fold.

Monks, emphasising its focus on capital growth rather than income, declared a single final dividend of 2p-a-share, down from 2.5p for the prior financial year.