11:58 AM EDT, 09/19/2024 (MT Newswires) -- Tesla's (TSLA) robotaxi event on Oct. 10 is attracting interest from tech investors and skepticism from the auto industry, UBS Securities said in a note on Thursday.

"Since the event will have a lot of 'tech' eyes on it, there is an opportunity for Tesla to not only convince that investor

base that the current valuation is justified, but that there is significant upside opportunity from here," UBS said, adding that it expects the stock to show strength leading up to the event, but it's uncertain if Tesla will meet expectations and maintain momentum afterward.

Tesla is hosting its event at Warner Brothers studio to showcase a futuristic robotaxi environment, UBS said. " [Tesla] can't show their service in the "real world" because they do not participate in the California Public Utilities Commission AV Passenger Service pilot program. They don't have an Autonomous Vehicle Tester Program Manufacturer's Testing Permit from the California Department of Motor Vehicles (DMV) for driverless testing or deployment," it added.

The event will highlight key areas including updates on its Full Self-Driving technology, plans for a vehicle-sharing network, economic projections for its robotaxi service, substantial AI investments, and possible new vehicle models, while also generating speculation about surprise announcements and drawing close scrutiny from investors and experts.

While "bulls" believe Tesla's technology will eventually succeed, widespread robotaxi deployment may be delayed as the company must prove its technology, navigate local regulations, and address operational challenges, UBS said.

UBS has a sell rating on Tesla with a 12-month price target of $197.

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