Shaped charges are widely employed in both military and civilian applications owing to their strong penetration capacities, such as weapon production, oil exploitation, mining, and tunneling. To augment the armor-breaking capability of a shaped charge, it is of utmost significance to enhance the velocity of the metal jet. Therefore, the hypervelocity shaped charge (HSC) has been proposed as a potential solution. Compared with ordinary shaped charges, HSCs can cause severer damage to the target owing to the faster velocity of its jet head. The Eulerian Finite Element Method (EFEM) is developed to build the axisymmetric numerical model, and it can simulate shockwave propagation, jet penetration, and target destruction. The model is validated by the experiments, and the convergence analysis is also performed. And the fundamental characteristics of HSC in underwater explosions including the metal jet and shockwave are investigated. Subsequently, the HSCs with the different liner truncation heights HL and liner materials are simulated to obtain the optimal parameter (range) for penetration capacity. Analyzing the numerical results, when 8mm≤HL≤13mm or the liner is made of aluminum, the metal jet generated by HSC will have a greater penetration capacity to the steel plate through the comparison of the crevasse diameter and residual velocity.