Tesla Edges Down, Moody’s Improve Debt Rating on ‘Dominant Position’

Trade Tesla Stock Your Capital Is At Risk
Ollie Martin
Updated: 25 Jan 2022

Key points:

  • Tesla continues to edge downwards as tech continues to sell-off
  • Moody's upgrades Tesla by two slabs on firm industry-leading position
  • New Giga factories set to further increase global capacity to match rising demand

Tesla (NASDAQ: TSLA) stock continued to edge further towards the downside this morning; with the absence of negative news, the stock is feeling the burn of a wider rotation out of high-growth tech companies. Tesla’s last earnings report illustrated the company’s consistent growth; smashing earnings estimates as the EV-industry leader. 

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Today, in a positive development for the company – credit rating agency Moody’s raised Tesla’s debt rating by two slabs, to Ba1 from Ba3, on the belief that the company is still on track as a ‘dominant’ industry leader. 

Stocks that are rated Ba1 to Ba2 are generally considered more speculative, normally involving some exposure to risk, whereas those rated Baa3 onwards are considered to be ‘investment grade’, with average credit risk. 

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The upgrade follows Tesla’s continued expansion, with manufacturing increases across the US, Europe, and China setting the company up well for its target of 1.4M vehicles this year, nearly doubling that of 2021. 

Moody’s referred to Tesla’s increasing global capacity:

“Considerable investments in new production facilities in Berlin and Austin enable the steep increase in vehicle deliveries, along with an increase in production capacity in its existing plants in Fremont and Shanghai” 

Tesla’s addition of its prized new Giga Berlin and Giga Texas factories will considerably bolster the company’s already prominent position; leveraging rising demand with an aggressive expansion strategy.

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