Ross Gerber, founder of Gerber Kawasaki Wealth & Investment Management and an early Tesla backer, has issued a stark warning about the electric vehicle maker’s future, centering his concerns on the company’s autonomous driving technology. The investor, who has transformed from a Musk supporter to a vocal Tesla bear, believes 2026 will be a pivotal year for the company as it struggles to compete in the increasingly competitive self-driving car market.
Gerber’s primary criticism focuses on Elon Musk’s refusal to incorporate LiDAR technology into Tesla’s vehicles, instead relying on AI and camera-based systems. This strategic decision has allowed Waymo, Tesla’s chief competitor and a subsidiary of Alphabet, to dominate the autonomous vehicle market with superior safety records. “Waymo has expanded rapidly in our area,” Gerber noted, suggesting that Tesla could “solve full self-driving next month” if they simply added sensors and improved their hardware systems.
The investor attributes Tesla’s current struggles partly to Musk’s year-long absence from the company while he led the Department of Government Efficiency and managed other ventures like X (formerly Twitter). “The year that Elon took off from Tesla really cost Tesla a year,” Gerber explained, emphasizing how this gap allowed competitors to gain significant ground.
Tesla’s self-driving technology has been central to the company’s bull thesis among investors, making its success critical to the stock’s valuation. However, the company has struggled to convince drivers to pay for the technology, raising questions about both its effectiveness and market appeal. Gerber warns that Musk must demonstrate tangible results from Tesla’s various initiatives in 2026 or face serious market backlash. “I’ve been saying this for some time, next year is kind of like the come-to-Jesus year for Tesla,” he stated.
Beyond technical challenges, Gerber identifies reputational damage as another significant obstacle. Musk’s controversial political involvement has created divisive views among consumers, potentially affecting Tesla’s market position even if the technology improves. “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,” Gerber speculated.
Gerber now recommends Alphabet stock as the superior investment for exposure to the self-driving market, citing Waymo’s established presence in major US cities and Alphabet’s substantial resources. He also expressed skepticism about Tesla’s humanoid robot ambitions, despite Musk’s bold claims about their potential to eliminate poverty and perform complex tasks like surgery.
Key Quotes
The year that Elon took off from Tesla really cost Tesla a year.
Ross Gerber, founder of Gerber Kawasaki Wealth & Investment Management, explained how Musk’s absence while leading the Department of Government Efficiency allowed competitors like Waymo to gain significant ground in the autonomous driving market.
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.
Gerber criticized Tesla’s refusal to use LiDAR technology, suggesting that adding sensors could quickly resolve the company’s autonomous driving challenges and help it catch up to Waymo’s superior safety record.
I’ve been saying this for some time, next year is kind of like the come-to-Jesus year for Tesla.
Gerber emphasized that 2026 will be a make-or-break year where Musk must demonstrate tangible results from Tesla’s AI and autonomous driving initiatives or face serious backlash from investors.
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.
Gerber highlighted how Musk’s controversial political involvement has damaged Tesla’s brand reputation, potentially undermining the company’s autonomous vehicle ambitions even if the technology improves.
Our Take
This analysis reveals a fundamental tension in AI development strategy: pure AI-vision approaches versus sensor-enhanced systems. Tesla’s bet on AI and cameras represents an elegant but potentially flawed approach that prioritizes cost and scalability over proven safety. Waymo’s success with LiDAR suggests the market currently values reliability over theoretical elegance.
The 2026 timeline is particularly significant because it represents a credibility threshold for AI-powered autonomous driving. After years of promises, investors and consumers are demanding results. Tesla’s struggles to monetize Full Self-Driving despite its technological sophistication highlight a crucial lesson: AI capability doesn’t automatically translate to commercial success.
Most concerning is how leadership distraction and brand damage can undermine even strong technology. This suggests that in the AI era, technical excellence alone is insufficient—execution, focus, and public trust are equally critical to success in deploying transformative AI technologies.
Why This Matters
This story highlights a critical inflection point for AI-powered autonomous driving technology and the competitive dynamics shaping the industry’s future. Tesla’s approach to self-driving—relying on AI and computer vision rather than LiDAR sensors—represents a fundamental strategic choice that could determine the company’s long-term viability in the autonomous vehicle market.
The contrast between Tesla’s AI-camera system and Waymo’s LiDAR-enhanced approach illustrates broader debates in AI development about the best path to achieving safe, reliable autonomous systems. Waymo’s current market dominance suggests that sensor fusion approaches may be winning over pure AI-vision solutions, at least in the near term.
For the broader AI industry, this serves as a cautionary tale about overpromising on AI capabilities. Tesla’s struggles to monetize its Full Self-Driving technology despite years of development underscore the gap between AI demonstrations and commercially viable products. The 2026 timeline Gerber identifies could become a referendum on whether AI-powered autonomous driving can deliver on its promises, with implications for investor confidence across the AI sector. If Tesla fails to show progress, it could trigger broader skepticism about AI timelines and capabilities in other domains.
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Source: https://www.businessinsider.com/tesla-stock-elon-musk-ross-gerber-waymo-self-driving-tsla-2025-12