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Shares of Tesla Inc.
TSLA,
-1.11%

rose 0.3% in afternoon trading Thursday, after S&P Global Ratings raised the electric vehicle (EV) maker’s credit rating by two notches into “investment grade” territory, given higher-than-expected deliveries and a ramp up in production to meet strong demand. The rating was raised to BBB, which is the second-lowest investment grade rating, from BB+, which was the highest speculative grade, or “junk,” rating. The rating outlook is now stable. “We now view Tesla’s credit profile more favorably because it continues to demonstrate market leadership in electric vehicles (EVs), with solid manufacturing efficiency that supports strong Ebitda [earnings before interest, taxes, depreciation and amortization] margins and sustained positive free operating cash flow (FOCF), above our previously established upside triggers,” S&P Global said. Tesla’s stock, which was down as much as 2.3% earlier Thursday, has gained 4.3% over the past three months while the S&P 500
SPX,
-1.02%

has slipped 2.1%.


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