Tesla shareholder Ron Baron, founder of Baron Capital, remains a steadfast supporter of the electric vehicle (EV) giant, projecting a potential 10-fold increase in Tesla’s stock value. Speaking at the Economic Club of New York on May 13, 2025, Baron shared his optimism about Tesla’s future while offering pointed advice for CEO Elon Musk, emphasizing the need for Musk to prioritize innovation over controversial public statements. This insight comes from a recent Barron’s article, highlighting Baron’s long-term investment strategy and Tesla’s evolving role in the EV industry.

Tesla’s Self-Driving Ambitions Gain Momentum

Baron expressed strong confidence in Tesla’s advancements toward fully autonomous vehicles, particularly with the upcoming launch of a self-driving taxi service in Austin, Texas, scheduled for June 2025. Tesla’s Full Self-Driving (FSD) technology has been a focal point for the company, aiming to revolutionize urban mobility.

Baron believes this innovation will significantly boost Tesla’s profitability, stating, “The profits of Tesla are on the verge of going through the roof.”

However, he noted that investors remain cautious, as sales in the first quarter of 2025 dropped 13% year-over-year, partly due to concerns over Musk’s political activities impacting the brand.

Tesla’s FSD system relies on a combination of advanced cameras, radar, and neural network-based software to navigate complex driving environments. The technology has improved steadily, with recent updates reducing human intervention rates by 25% compared to 2024 models, according to Tesla’s internal data. If successful, the Austin taxi service could set a precedent for wider adoption, potentially transforming how EV fleets operate in cities.

Advice for Musk: Innovate, Don’t Alienate

Baron, who first met Musk in 2010 during Tesla’s initial public offering, urged the CEO to refocus his public image. He criticized Musk’s recent comments on fraud and abuse, suggesting they detract from Tesla’s mission.

“When Musk broke out the chain saw talking about fraud and abuse, ‘he gave the wrong image of himself,’” Baron said, adding, “I hope he starts resurrecting his image as someone who builds things.”

This advice underscores the importance of Musk’s leadership in maintaining investor confidence as Tesla navigates a competitive EV market.

Baron’s perspective aligns with industry trends where consumer trust in EV brands increasingly hinges on leadership reputation. Tesla’s stock, closing at $334.07 on May 13, 2025, reflects a 4.58% gain, contrasting with the S&P 500’s 0.7% rise and the Dow Jones Industrial Average’s 0.6% decline. Yet, Baron remains unfazed by short-term fluctuations, focusing on Tesla’s long-term potential.

Economic Outlook and Tesla’s Growth Trajectory

Baron’s investment philosophy dismisses macroeconomic concerns like interest rates or tariffs, believing they will “normalize over time.” His firm, Baron Capital, began investing in Tesla in 2014 with $400 million, a stake that grew to over $4 billion by 2016 and has since multiplied more than 10-fold. Baron predicts another 10x growth, driven by Tesla’s innovation in EVs and autonomous tech, though he provided no specific timeline for this forecast.

The EV industry continues to expand, with Tesla maintaining a 49.8% U.S. market share in Q1 2025, despite growing competition from companies like Rivian and Lucid. Tesla’s focus on autonomy could further solidify its position, especially as regulatory frameworks evolve to support self-driving vehicles. For EV owners and enthusiasts, Tesla’s advancements promise not only cutting-edge technology but also potential cost savings—autonomous taxis could reduce per-mile ride costs by 30%, based on current ride-sharing data.

Baron’s optimism reflects a broader belief in Musk’s vision, despite challenges. As Tesla pushes forward with self-driving tech, its ability to balance innovation with public perception will be key to achieving the growth Baron envisions.