(Reuters) – Shares of Tesla Inc surged 20% on Tuesday to hit $940, extending a stunning rally that has more than doubled the company’s market value since the start of the year as more investors bet on Chief Executive Elon Musk’s vision.

The latest surge was partly fuelled by Panasonic Corp saying on Monday its automotive battery venture with Tesla was in the black for the first time.

“Investors are now starting to believe that Tesla can make mass-volume electric vehicles, and automakers, battery makers and suppliers can make money from EVs,” said Cho Hyun-ryul, analyst at Samsung Securities.

Some analysts have attributed the rally to short covering as well. Short interest in Tesla stood at 13.8% as of Jan. 30, according to Refinitiv data.

Shares of heavily shorted companies can at times get pushed higher as traders rush to buy stock to cover their short bets, triggering what is known as a “short squeeze”.

Panasonic shares closed up 10%, while those of Tesla’s Asian suppliers South Korea’s LG Chem Ltd and China’s CATL also closed higher.

Tesla’s surge on Tuesday valued the company at nearly $170 billion.

Tesla last week reported a second consecutive quarterly profit and said it would comfortably make more than half a million vehicles this year.

Billionaire investor Ron Baron, whose firm holds a nearly 1% stake in Tesla, said he will not be selling a single Tesla share, adding he believes the carmaker could hit $1 trillion in revenue in 10 years.

Tesla reported revenue of $24.6 billion in 2019.

Short-seller Citron Research, which recently went long on Tesla shares, however, said the recent rally creates an opportunity to go short on the stock.

“When the computers start driving the market, we believe even Elon would short the stock here if he was a fund manager,” Citron said in a tweet.

“This is no longer about the technology, it has become the new Wall St casino.”

Panasonic also said it was expanding production to keep pace with demand from Tesla, indicating the U.S. company was finally getting ahead of battery production bottlenecks it flagged last April. The daily percentage gain was the stock’s biggest in about four years.

Shares rose 10% in LG Chem and CATL, both of which signed battery-making deals with Tesla last week, ending the automaker’s exclusive partnership with Panasonic.

Shares of fellow EV battery makers SK Innovation Co Ltd and Samsung SDI Co Ltd rose 4.5% and 9%, respectively.

POSCO Chemical Co Ltd, which recently signed a $1.6 billion deal to supply battery-making materials to LG Chem, rose 4.6%.

EV HOPE

Panasonic said on Monday it expects to stabilize profit at Tesla’s Gigafactory by next year, and that there is a lot of room to improve production efficiency for what is an EV’s most expensive component, accounting for about a third of total cost.

The firm is also gearing up to mitigate the loss of the exclusive Tesla partnership by setting up a joint venture with Toyota Motor Corp to develop a type of EV battery that the pair plan to sell to any automaker.

“When you look back, say two to three years ago, there were doubts about whether the EV era would arrive,” said analyst Kang Dong-jin at Hyundai Investment & Securities in Seoul.

“But now there is more viability about the sector thanks to Tesla’s strong sales and Europe’s tougher emissions regulations,” he said.

The European Union introduced tighter emission rules after Volkswagen AG said it had cheated diesel pollution tests. Britain on Tuesday will announce a ban on the sale of new petrol and diesel cars from 2035, five years earlier than previously planned.