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Scottish Mortgage (SMT.L) manager James Anderson said Tesla (NASDAQ: TSLA) was at the helm of “one of the most important changes that we will ever see in our investment lifetimes.” Anderson was referring to Tesla Energy and its potential for growth during and after the pandemic.
Anderson co-manages the top-performing, FTSE 100-listed £11.8 billion trust with Tom Slater. Tesla is Scottish Mortgage’s top stock making up 11.1% of its portfolio. Anderson theorized that the pandemic could have brought about the end of carbon and started an energy revolution focused on renewables.
The first quarter of 2020, apart from the pandemic and in the long term possibly of greater significance, saw one of the most important changes that we will ever see in our investment lifetimes,” he told City Wire UK.
Explaining his thoughts, Anderson said: “I think by the end of March we’d got to a position where the most likely outcome for the world is the end of carbon. We’ve probably only had three energy revolutions in the history of mankind. They are absolutely central to not just our economic development, but they also alter the very nature of our society.”
Anderson referred to data that revealed 52% of Germany’s electricity was generated from renewable power sources during the first quarter of 2020 to support his theory. There were other countries, including the United States, turned to renewables during the first quarter when most stay-at-home orders and lockdowns were enforced.
It appears that the pandemic has shown the real power of renewable resources and their advantages. As such, it makes sense that Anderson and Slater looked for companies developing renewable energy and battery storage technologies. “I know of none outside Tesla itself that exist in the public markets,” he said.
It appears that Tesla stands at the cusp of yet another revolution, and it seems the company is aware of its situation. Lately, TSLA has been granted electricity generation licenses in at least two countries, namely the United Kingdom and Australia. In its own backyard, Tesla Energy has partnered with PG&E, an American investor-owned utility with publicly-trades stock, on a project in Moss Landing.
Anderson isn’t the only person to see Tesla’s potential in the energy sector or role in the revolution, either. Last week, Jefferies raised TSLA’s price target to US$1,200 from US$650 and gave it a BUY rating. Jefferies analyst Philippe Houchois made the call after concluding that the transition to EVs and renewables would accelerate because of the global pandemic.
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Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.