S&P Global Ratings on Monday raised its Tesla Inc. debt ratings to BB-, from B+, leaving the Silicon Valley car maker’s bonds two notches from investment grade.
“Improved execution, increasingly efficient production, and global expansion continue to strengthen the company’s competitive position,” S&P said.
The debt ratings agency also cited Tesla’s third-quarter deliveries, its proxy for sales, as one of the reasons for the upgrade, and praised the production ramp of the Model Y, the compact SUV that is Tesla’s latest vehicle.
“This ramp up in production was significantly faster than its initial Model 3 ramp up, which took over nine months to reach the same weekly rate,” S&P said. “We expect further improvements in efficiency, cost, and technology as Tesla builds on lessons learned from prior factories.”
It said it expects Tesla to deliver more than 470,000 in 2020, which would be within the company’s goals for the year. Sales could reach more than 800,000 in 2021, S&P said.