Buy and hold billionaire Ron Baron is defending his investment in Tesla, saying he doesn't care that he hasn't made much money from the electric car maker yet.

"I think we're going to make 20 times our money because the opportunity is so enormous," the 75-year-old founder of Baron Capital told CNBC's "Squawk Box" on Monday. "People say, 'Gee, they're spending a lot of cash.' Of course, they're spending a lot of cash. They're building factories."

"You have to expect when you're doing something entirely different than what anyone has done before" not everything is going to happen on time, added Baron.

Tesla represented 1.62 percent of Baron Capital's assets under management as of March 31. Tesla, with a market value of nearly $52 billion, has seen its shares fall more than 6 percent during the past three months.

Investors have been concerned in part over the company's ability to ramp up production of the Model 3. Investors were also puzzled by Tesla chief Elon Musk performance during the company's first-quarter earnings call earlier this month. Musk cut off questioners on the call, and at one point dismissed what he called a "boring, bonehead" question from a key analyst.

Musk has acknowledged that it was "foolish" of him to snub analysts.

Although Musk has insisted the company neither needs nor wants new funding, many believe Tesla will seek to raise more capital this year.

Baron said he doesn't expect Musk will come back to the market for more money unless "he wants to grow as fast as he hopes."

"The capital he's going to need to produce new vehicles is much less than other companies are going to be spending and they'll be using less labor," he added.

Baron, who has been investing in Tesla since 2014, said many investors buy and sell stocks on the basis of news. But Baron said his firm has made billions of dollars by doing extensive research, buying shares of what he feels are undervalued companies.

If an investor waits until something is successful then, "it's too late. Then you're going to pay a high price," said Baron, whose firm has more than $27 billion assets under management. "What we try to do is buy when that development is taking place."

—Reuters contributed to this report.