Longtime Tesla investor Ross Gerber says 2026 will be a year of reckoning for Musk's car company

• Tesla investor Ross Gerber is still eyeing trouble ahead for Elon Musk's carmaker
• After calling for a difficult 2025, Gerber sees 2026 as a make-or-break year for Tesla.
• Gerber predicts backlash from markets if Tesla's updates on key initiatives don't live up to the hype.

Ross Gerber, an early backer of Tesla, is worried about the future of Elon Musk's car company.

Gerber doesn't hold back about what he thinks is the EV maker's biggest issue: its autonomous driving technology. Failure to live up to expectations would be a blow to investors' bull thesis for Tesla, which is pegged in large part to the success of its self-driving cars.

Gerber, the founder of Gerber Kawasaki Wealth & Investment Management, has been a vocal Tesla bear all year. His perspective hasn't changed as Musk's company has rolled out driverless cars in cities across the US, and what he's seen has actually made him more concerned.

Gerber told Business Insider why he thinks 2026 will be a pivotal year for the EV maker, in which Musk will be forced to show real progress on the lofty goals he's set for Tesla.

Gerber sees a make-or-break year ahead

Anyone who follows Gerber knows that he has gone from a Musk supporter to an outspoken Tesla bear in recent years. He's publicly called for Musk to resign and criticized his focus on other ventures, such as his time leading the Department of Government Efficiency and his efforts to buy X before that.

Musk stepped away from government months ago, but Gerber maintains that the time he spent away from his companies is still hurting Tesla stock, particularly as the it dukes it out with competitors in the self-driving car market.

"The year that Elon took off from Tesla really cost Tesla a year," Gerber told Business Insider.

In that time, Tesla's chief competitor, Waymo, has continued to dominate the self-driving car market. Gerber attributes this to Musk's refusal to use LidAR technology in Tesla's vehicles, a remote sensing method that has helped Waymo increase the safety of its cars on the road.

"Waymo has expanded rapidly in our area," he said. "So Tesla has to accept, if they just throw a couple sensors on and improve their hardware system, they can solve full self-driving next month."

However, Gerber thinks that Musk will continue to favor the use of AI and cameras. And since Musk has staked much of Tesla's future on its self-driving car technology, he thinks this approach is about to start costing the company.

Overall, Gerber thinks that 2026 will be the year Musk needs to show investors results of Tesla's many initiatives or face backlash from the market.

"I've been saying this for some time, next year is kind of like the come-to-Jesus year for Tesla," he said.

Musk has said that self-driving technology is Tesla's future, but so far, the company has struggled to get drivers to actually pay for it.

Gerber added that he sees Google and Waymo's parent company, Alphabet, as the best stock to buy for gaining exposure to the self-driving car market, due to Waymo's edge over Tesla and Alphabet's resources.

His bullish thesis on Waymo centers on the company's strong presence in major US cities, which is expanding while Tesla has only just begun its rollout this year.

"Google has the money and they're not going to wait," Gerber said. "They know they can scale, so for Tesla to catch them, they would need this to work right away, basically, and then they need to start building infrastructure."

Another problem Gerber sees is one he's brought up before, which is Musk's public perception. That might be a problem even if Tesla catches up to competitors in key areas like autonomous driving. Gerber thinks the image of Musk has yet to recover since his foray into politics sparked divisive views among consumers earlier this year.

"The image of the company is so negative in people's minds that even if they had cabs everywhere, people would just choose another cab company, because there's plenty to choose," he speculated.

Gerber noted that he also has strong doubts about the demand for the humanoid robots that Tesla is building, despite Musk's claims that they'll eliminate poverty and be able to perform surgery.

Tesla did not respond to a request for comment from Business Insider.