Tesla’s stock has dropped by 19.8% in 2025 due to declining sales and CEO Elon Musk controversies. However, Joe Dennison of the Virtus Zevenbergen fund predicts a rebound in 2026 driven by autonomous vehicles and new, affordable models. The fund has a 7.3% allocation to Tesla, its fourth-largest holding.

Dennison views Tesla as more than a car company, praising its AI, robotics, and sustainable energy leadership. Despite declining sales, Tesla’s stock is down 19.8% in 2025, from a 62.5% gain in 2024. Dennison remains optimistic, citing Tesla’s potential in the electric and autonomous transportation future.

Challenges faced by Tesla in 2025 include declining sales and controversies linked to CEO Elon Musk. Dennison compares the current situation to 2016 when the launch of the Model 3 led to a stock decline. Musk’s political involvement has also stirred negative publicity, affecting Tesla’s sales in Europe.

Dennison believes that Tesla’s turnaround will be driven by advances in autonomous vehicles, with the robotaxi program gaining momentum. He highlights Tesla’s AI capabilities, strong balance sheet, and data stream as key factors for success. Additionally, new vehicle models and expanding sustainable energy business are expected to boost growth.

Read more at Morningstar: Tesla’s Stock Is in Trouble, but This Fund Manager Sees a Comeback in 2026