diff --git a/src/shared/previewUtils.ts b/src/shared/previewUtils.ts
index f5de5279..4df13c2c 100644
--- a/src/shared/previewUtils.ts
+++ b/src/shared/previewUtils.ts
@@ -239,7 +239,7 @@ export class PreviewUtils {
     targetOrg?: string
   ): string[] {
     let appPath = `lwr/application/e/devpreview/ai/${encodeURIComponent(
-      'localdev%2Fpreview'
+      'localdev/preview'
     )}?ldpServerUrl=${ldpServerUrl}&ldpServerId=${ldpServerId}`;
     if (componentName) {
       // TODO: support other namespaces
diff --git a/test/shared/previewUtils.test.ts b/test/shared/previewUtils.test.ts
index 9063f1a8..a0050903 100644
--- a/test/shared/previewUtils.test.ts
+++ b/test/shared/previewUtils.test.ts
@@ -282,6 +282,25 @@ describe('previewUtils', () => {
     expect(parsed.values['target-org']).to.be.undefined;
   });
 
+  it('generatedComponentPreviewLaunchArguments propertly encodes parameters', async () => {
+    const result = PreviewUtils.generateComponentPreviewLaunchArguments('https://localhost:3333', testLdpServerId);
+
+    const parsed = parseArgs({
+      args: result,
+      options: {
+        path: { type: 'string' },
+        'target-org': { type: 'string' },
+      },
+    });
+
+    for (const v in parsed.values) {
+      if (v.length === 0) {
+        continue;
+      }
+      expect(decodeURIComponent(v) === decodeURIComponent(decodeURIComponent(v)));
+    }
+  });
+
   it('getTargetOrgFromArguments finds -o flag', async () => {
     const args = ['command', '-o', 'myOrg', 'otherArg'];
     const result = PreviewUtils.getTargetOrgFromArguments(args);