UBS: Tesla’s future will be decided at the Model 3 launch event (TSLA)

Tesla Model 3

The Tesla Model 3 will either make or break the company.

If successful, the mass-marketed, more-affordable, all-electric sedan will transition Tesla from a boutique auto brand to a major manufacturer. The company releases the first production Model 3s on Friday, and UBS Analyst Colin Langan says it's an event that will decide the company's future.

"The event should provide the full car specs as well as get a better peek inside the vehicle," Langan wrote in a note to clients sent out on Wednesday. "With orders of 374k, expectations are high; therefore positive media reaction to the production vehicle is important."

Langan says the company has to show its new vehicle well. There are some major changes, like the lack of an instrument cluster and a large, horizontal touchscreen that replaces many of the console functions. If these changes don't sit well with event attendees, especially the members of the media, UBS said it could impact future orders of the vehicle.

Tesla has reasons to worry, according to Langan. The car skipped a beta prototype, which could impact its final quality.

Langan is one of Wall Street's most bearish analysts on Tesla. His price target for the company sits at $185, some 46% lower than its current price. His target accounts for an estimate of 1.2 million vehicles with a 12.5% operating margin.

Langan believes shares could go up only if Tesla sells more than 2.2 million vehicles by 2025 and maintains a 15% operating margin for its auto business.

Tesla shares have been on the rise ahead of the Model 3 release. Elon Musk, the CEO, said the company is overvalued when you look at current production levels, but "low if you believe in Tesla's future."

David Einhorn, the famous investor behind Greenlight Capital, is currently shorting, or betting against, Tesla. He said he would rather give his money to GM because Tesla is just a "science experiment."

Tesla shares are up 60.53% this year.