Destructive innovation in the automotive industry is irreversible
Editor’s note: This article comes from WeChat public account “ popov Classmates “(ID: trip517), author Popov.
Elon Musk often acts by intuition, but in the past month or so, Tesla’s stock price has more than doubled, and its total market value has approached the leader of the automotive industry, Toyota, becoming the brightest star in US stocks.
Tesla Motors has been in short supply since there was only one plant in the United States since its launch. Users often have to wait for months from ordering to picking up. The sharp rise in Tesla’s stock price, which first began at the Shanghai plant (with an annual planned production capacity of 250,000 vehicles), was successfully trial-produced at the end of 2019, predicting that the capacity bottleneck was about to be broken. The subsequent financial report for the fourth quarter of 2019 further confirmed the outbreak of production capacity: In 2019, Tesla delivered a total of about 367,500 vehicles, an increase of 50% over the previous year, which greatly exceeded Wall Street expectations.
In addition to the improvement of production capacity fundamentals, another factor that lifts Tesla’s stock price is the “short effect”. Tesla has always been a hot target for short selling power in the US stock market, second only to Apple. According to S3 Partners, a data company that tracks short activity, the number of Tesla stocks shorted by 5% in January this year. But in the past month, Tesla’s soaring stock price has forced short sellers to buy more stocks to hedge the risk of short selling, resulting in the so-called “short squeeze” effect, thus