Tesla Inc. (TSLA), the forward-thinking company headed by Elon Musk, is preparing to launch its Model 3 today. The first round of production will be released to high levels of critical and public anticipation, with the electric car company attempting to prove its merits and worth via the launch. A report by Business Insider suggests that a successful launch of the Model 3 could mean that Tesla will be able to make the transition from boutique brand specializing in niche automobiles into a large-scale manufacturer. UBS put the stakes even higher: analyst Colin Langan expects that the Model 3 launch will fully determine the future viability of Tesla.

Priced to Move

The Model 3 is designed for mass production, with an all-electric power system and a lower price tag than previous Tesla vehicles. Langan acknowledges that the public anticipation of the release is high: "With orders of 374k, expectations are high; therefore, positive media reaction to the production vehicle is important." Like most analysts, though, he's not prepared to make a recommendation until the launch event "[provides] the full car specs as well as...a better peek inside the vehicle."

For a launch project like this one, presentation is key. The new Model 3 features a number of significant changes which will need to be presented in a sensitive way. The Model 3 does away with the previous Models' instrument cluster, and instead adds a large touchscreen to replace a number of console functions. Early viewers of the Model 3 and especially those in the media could have a major impact on public perception.

Langan Remains Bearish

Colin Langan has come down as a highly bearish analyst when it comes to Tesla. The UBS analyst's price target for the company is just $185, nearly 50% lower than its current trading price. This target estimates 1.2 million vehicles with an operating margin of 12.5%. Langan indicated his belief that shares could go up on the condition that Tesla sells at least 2.2 million vehicles by 2025, and if it is able to maintain a 15% operating margin on its automotive side. However, the Model 3 has skipped a beta prototype, which might mean there are lasting issues with the final version of the vehicle.

Nonetheless, Tesla shares have risen in the period leading up to the launch, climbing by more than 60% so far this year. Musk, the CEO of the company, suggested that Tesla was overvalued based on current production levels but "low if you believe in Tesla's future." David Einhorn, the billionaire investor who heads up Greenlight Capital, has made a bet against Tesla, calling the company a "science experiment."

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.