Tesla Set to Shed Junk-Bond Taint as Wall Street Doubts Fade

Tesla Inc., whose status as a stock-market darling has turned it into the world’s most valuable car company, may soon win over some of Wall Street’s slowest moving skeptics: Bond-rating analysts.

Investors had been expecting Tesla to be upgraded out of junk status as soon as early next year, marking a credit-market milestone for a company that’s risen to dominate the electric-vehicle industry in less than two decades.

But such a boost may come sooner, thanks to the company’s steady stream of profits, according to Bloomberg Intelligence credit analyst Joel Levington. Tesla had nearly $19 billion in cash and short-term investments by the end of June, and Levington expects it to generate over $24 billion of additional free cash flow through next year. That would be more than General Motors Co. and Ford Motor Co. combined and far more than Tesla’s debt load.