Tesla Now Considered Investment-Grade by Moody’s with ‘Baa3’ Rating

Tesla has been upgraded to blue-chip status by Moody’s Investors Service, which gave the company a “Baa3” long-term issuer rating on Monday (via Yahoo Finance). Blue chip status is given to companies that are valuable and well-established, indicating that the consultancy thinks Tesla is now investment-grade.

Baa3 is the lowest rung on the Moody’s investment-grade stock ladder, with “Ba1” being at the top of the firm’s speculative grade rating system.

“The rating action reflects expectation that Tesla will remain one of the foremost manufacturers of battery electric vehicles with an expanding global presence and very high profitability,” Moody’s said in a statement. “The upgrade also incorporates governance considerations, including Tesla’s prudent financial policy and management’s operational track record.”

Moody’s expects Tesla to deliver around 1.8 million vehicles worldwide in 2023, which would mark a 34-percent increase from its 2022 deliveries, if achieved.

The consultancy said “considerable investments” and new battery and vehicle production measures would cause a “steep increase” in deliveries. Additionally, Moody’s in its statements highlighted Tesla’s upcoming Cybertruck and generally expanding product lineup.

Last year, Tesla’s stock was also upgraded by S&P Global Ratings to become investment-grade, meaning it has “adequate capacity to meet financial commitments,” while demonstrating less vulnerability to economic hardship.