Tesla is lifted to investment grade at S&P
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S&P Global Ratings raised its long-term credit rating on Tesla (NASDAQ:TSLA) to BBB from BB+ to place the company at the investment grade level for the first time.
The ratings agency said it now views Tesla's (TSLA) credit profile more favorably because it continues to demonstrate market leadership in electric vehicles, with solid manufacturing efficiency that supports strong EBITDA margins and sustained positive free operating cash flow.
"In 2022 and 2023, we expect Tesla to sustain FOCF to sales of over 10%, compared with our prior upside trigger of 2%, backed by industry-leading EBITDA margins of roughly 20%, compared with our upside trigger of 18% and well above our 10% threshold for above average margins for automakers. This is despite high expenses related to the ramp up of its Berlin and Austin manufacturing facilities, ongoing supply chain disruptions, and rising commodity costs." 
S&P noted that Tesla (TSLA) has partially offset the effects of the industry disruption with higher average selling prices, sale of regulatory credits, and lower manufacturing costs compared with our prior expectations.
Shares of Tesla (TSLA) pared an earlier loss and was down 0.30% to $240.07 at 1:30 p.m. ET.