Tesla was upgraded two notches to Ba1 from Ba3 by Moody’s with a positive outlook. The rating is based on the view that Tesla will maintain its position as the leading manufacturer of battery EVs while rapidly continuing to increase its scale and improving profitability. Moody’s anticipates Tesla will deliver ~1.4mn vehicles in 2022 vs. ~936,000 in 2021. EBITA margins are expected to rise to 16% in 2022 from 12% in 12M2021. Tesla had cash balances of $16bn at end-September 2021 and Moody’s expects free cash flows to increase considerably from an estimated $3.1bn in 2021. Also, Moody’s estimates debt/EBITDA dropped below 1x at end-2021 and is expected to remain at that level in 2022.

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