Moody's upgrades Tesla

Moody's Investors Service said it upgraded Tesla, Inc.’s ratings, including the corporate family rating to B2 from B3, and senior unsecured rating to B3 from Caa1 and the speculative grade liquidity rating to SGL-2 from SGL-3.

“The upgrade reflects Tesla's sustainable position in the auto industry as a specialized producer of pure battery electric vehicles (BEVs). However, preserving this strong position in BEVs in the face of emerging competitive challenges will depend on Tesla's progress around manufacturing efficiency and product development to achieve even broader customer acceptance at an affordable price,” the agency said in a press release.

“Moreover, Tesla's expansion prospects benefit from regulatory pressures on the auto industry to reduce emissions so Tesla's advanced position in BEVs is an important factor at the higher rating. At the same time, the weak governance at Tesla also constrains the rating,” Moody’s said.

The outlook is stable.

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