Tesla’s credit rating is moving up to investment-grade status, with Moody’s Investors Service moving the rating up a notch to Baa3 late yesterday. The move is not a surprise as the S&P Global Ratings did a similar bump of the company’s credit score in October.
In a statement, Moody’s Senior Credit Officer Rene Lipsch noted:
Tesla will maintain its position as one of the leading manufacturers of battery electric vehicles as the company further solidifies its global footprint. (via Bloomberg)
Moody also cited Tesla’s upcoming Cybertruck production, regional production facilities and the company’s focus on efficiency and financial leverage as reasons to bump up the credit rating.
Per Bloomberg, the move from junk to blue-chip is both symbolic and practical for the automaker. In theory, the new credit rating could mean cheaper financing and should now mean that Tesla will be considered a blue-chip credit for investors.
Even with the previous junk rating, Tesla thrived. Tesla became the first junk-rated company to achieve a $1 trillion market value in October 2021. Which, at the time, made it the 8th largest company in the world by market cap. This new investment rating will only help it grow.
