Impending short squeeze?!

First of all, what is a short squeeze?? It is a situation in which the price of a stock rises to such an extent that investors who have sold short purchase the stock in order to limit their losses, causing the price to rise further.

The share price of $Faraday Future Intelligent Electric Inc.(FFIE)$  has dropped around 90+% YTD since the beginning of year 2024. Its market cap is currently at ~$4million and has a high short interest of ~86% (36.3 mil out of 42 mil shares,were shorted as of 15 Feb 2024). https://www.nasdaq.com/market-activity/stocks/ffie/short-interest

Although it only sold 10 cars to date, the company is selling highly niche ultra-luxury cars. One FF 91 2.0 Futurist Alliance model costs ~$0.3 million and it has some impressive features. It can go from 0 to 60 mph in under 2.3 seconds and it claims an EPA range of 381 miles on a single battery charge.

On the other hand, most EV companies focus on sedan cars for domestic uses. The rise of various EV companies has resulted in price war to fight for larger market share. Furthermore, the competition in the EV market has intensified as numerous traditional car markers (Mercedes-Benz, BMW etc) are also investing and building more EV units. With persistently "sticky" inflation, the high interest rate may stay even longer than expected and affect consumer's spending power. Hence, the automobile industry $Tesla Motors(TSLA)$  $Rivian Automotive, Inc.(RIVN)$   $XPeng Inc.(XPEV)$ $NIO Inc.(NIO)$  may be heavily affected. 

What do you think? Let me know your thoughts!

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