Tesla Nears Blue-Chip Status Following Credit Score Upgrade from S&P

The company referred to as "Tesla Inc." The electric-vehicle maker's credit score was raised to investment grade by S&P Global Ratings. Analysts Nishit Madlani and David Binns said in a statement that the company's rating was upgraded to BBB on Thursday, two steps above junk. They wrote that they now view Tesla's credit profile more favorably because it continues to demonstrate market leadership in electric vehicles, with solid manufacturing efficiency and positive free operating cash flow. In the third quarter, the company delivered 343,830 vehicles Oct.19 In recent quarters, it has paid down its debt while remaining the world's leading maker of electric cars, with four auto plants on three continents. 

S&P's upgrade is the latest, but not the last for the company. Its ratings are expected to move towards a high BBB this year. He said in an email that the upgrades are a result of the automaker's low financial leverage and best in class margins which should continue to stand out among its global peers. The debt of the carmaker needs one more upgrade from a major credit grader to be considered investment grade. It was upgraded to Ba1, one notch below investment grade. According to the S&P analysts, by the end of the century, there will be a substantially higher number of models from established global automakers and startup companies.