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S&P Throws Tesla's Surging Shares on the Junk Heap

Tesla Model X
Tesla Model XPhotograph by Tim Rue/Bloomberg

Tesla may have stellar crash ratings, but the company’s financial safety is only about as dependable as that of Venezuela. That’s the assessment of Standard & Poor’s, which just slapped a “B-” credit rating on the carmaker and put Elon Musk’s baby in the same “junk” grade as struggling sovereign lenders and crisis-wracked companies.

Long suffering Sears and Radio Shack have S&P ratings only slightly lower, at CCC+, while Best Buy and General Motors hold slightly higher grades. “We believe there is considerable uncertainty in Tesla’s long-term prospects and believe that the company is less likely (compared to larger, more established automakers) to successfully adapt to competitive and technological displacement risks over the medium to long term,” S&P analysts wrote.