Baron, speaking Tuesday on CNBC's "Squawk Box," cited Tesla's ongoing expansion in China; revenue growth; and advancements in all-electric vehicle technologies as reasons for his unwavering support.
"Tesla has an opportunity," he said, adding several automakers — specifically German competitors — are now attempting to play catch-up with Tesla on its advanced technology.
Baron, CEO and chief investment officer of Baron Capital, also mentioned the cost of batteries for all-electric vehicles lowering by tens of thousands of dollars as a positive for the company.
Tesla stock remained relatively unchanged Tuesday morning after opening at $227.62 a share.
Baron Capital owns more than 1.6 million shares of Tesla valued at $358 million. Tesla is currently Baron's 13th largest holding, down from eighth late last year. Baron said the decline was due to value depreciation, not the firm selling shares.
"We haven't sold any stock," he said, citing Tesla previously being valued at more than $300 per share prior to "some self-inflicted wounds."
Baron did not specify what those "self-inflicted wounds" were, however it has been a chaotic year for the company following Musk tweeting about having "funding secured" to take the company private at $420 a share in August 2018.
That infamous tweet eventually led to a September settlement agreement with the Securities and Exchange Commission that removed Musk from his chairman role at the company.
Baron made headlines last year by saying Tesla could generate $1 trillion in revenue by 2030. Tesla's revenue was $21.5 billion in 2018, up from $11.8 billion a year earlier.
Baron Capital's largest investments by market value are CoStar Group, Vail Resorts and IDEXX Laboratories. Each are valued at more than $1 billion.