Elon Musk again took to Twitter to express his views about the world’s largest credit rating agency Moody’s. He was replying to a tweet by Dave Lee, in which Moddy’s called Tesla is “not investment grade”.
Dave Lee wrote: Moody’s claim that Tesla is “not investment grade” is. Even more ridiculous is them doubling down on junk credit ratings claiming Tesla doesn’t have enough vehicle models. Fewer models = innovate more quickly on those models with more focus. Intentional strategy by Elon Musk.
Elon Musk replied: Moody’s is irrelevant
Moody’s is irrelevant
— Elon Musk (@elonmusk) September 3, 2022
A user posted a picture of an email reply from Moody’s executive Rene. Rene gave reasoning as to why Moody’s is not going to give a rise in ratings to Tesla. Rene made a statement in the email that The ratings could be upgraded if Tesla successfully expands its global footprint, maintains a strong competitive global presence as other automakers offer an increasing number of battery electric models, and improves its product breadth. Tesla’s ability to sustain an EBITA margin of at least 7% (measured excluding the contribution from emission credits) and a consistent, prudent financial policy are also important considerations for higher ratings. Further, Tesla will need to maintain very good liquidity, including ample cash and considerable committed availability under its revolving credit facility.
