SAN FRANCISCO (Reuters) - Tesla Inc's TSLA.O short sellers have suffered $3 billion in losses since the end of 2018, including a $500 million hit on Friday after the electric carmaker's quarterly deliveries beat investors' expectations and drove its stock to a record high.

Traders shorting Tesla have lost about $900 million in just the first two trading days of 2020, adding to mark-to-market losses of $2.9 billion last year, according to S3 Partners, a financial analytics firm.

Tesla said on Friday it delivered 112,000 vehicles in the fourth quarter, beating expectations of 104,960 vehicles, according to IBES data from Refinitiv. It delivered approximately 367,500 vehicles during all of 2019, just meeting the low end of its target to deliver 360,000 to 400,000 vehicles.

That report pushed Tesla’s stock up 3.7% to $446.21, bringing its gain in the past three months to about 90% in a rally fueled by a surprise third quarter profit and signs of progress ramping up production at the company’s new factory in China.

Tesla on Friday said it demonstrated a production run-rate capability of more than 3,000 units per week at the Shanghai factory.

Overall short interest in Tesla is about $11.9 billion, and while some traders have cut their losses in recent months, Friday’s rally did not appear to be forcing significantly more traders to capitulate, said Ihor Dusaniwsky, managing director of Predictive Analytics at S3 Partners.

About 21% of Tesla’s shares are currently sold short, down from about 28% in October, according to S3 Partners.

Chief Executive Elon Musk's progress has defied skeptics expecting Tesla to be overtaken by more established car companies, including General Motors Co GM.N, Ford Motor Co F.N and BMW BMWG.DE.

“We think questions remain about first half 2020 results and gross margin sustainability; we point out that Tesla is already lowering prices in China and faces a flood of (electric vehicle) competition in the U.S., with at least 25 new models debuting this year,” CFRA analyst Garrett Nelson wrote in a client note on Friday. Nelson upped his price target for Tesla by $80 to $400 and maintained his “hold” opinion.

Worries about demand for Telsa’s Model 3 sedan sent the company’s stock down to 2016 lows last June, but since then the shares have surged 150%.

The gains in Tesla’s shares have elevated its market capitalization to $80 billion, compared to GM’ market value of $52 billion and Ford’s market capitalization of $37 billion.