Investor's Corner
Moody’s upgrades Tesla (TSLA) to ‘Stable’ over Model 3 efficiencies, adequate liquidity
Tesla (NASDAQ:TSLA) recently received a positive report and upgrade from Moody’s Investors Service, which changed its outlook towards the electric car maker from “Negative” to “Stable.” In its report, Moody’s affirmed Tesla’s ratings, including the company’s B3 Corporate Family Rating (CFR) and Caa1 senior unsecured ratings. Tesla’s speculative grade liquidity was also changed from SGL-4 (Weak) to SGL-3 (Adequate).
According to the financial firm, Tesla’s B3 CFR reflects the company’s achievements in the production ramp of the Model 3, whose output is “now in line with Moody’s earlier expectations.” This, according to the firm’s report, should allow Tesla to “achieve production efficiencies, lower costs, and strengthen automotive gross margins.” These improvements are also key to offset the losses generated by the company’s automotive service operations, which could then push Tesla towards profitability. Moody’s added that the sale of regulatory credits is expected to give a boost to Tesla’s finances as well.
“An important contributor to achieving net profit will be the sale of regulatory credits, which represent no incremental cost to the company and fall directly to earnings. We expect these sales, which accounted for over $400 million in revenues/earnings during 2018, will continue to grow as emission regulations become more restrictive in all major markets,” Moody’s wrote.
Moody’s stated that it still expects Tesla to generate modestly negative free cash flow of around $500 million over the next 12 months, though the firm expects the electric car maker’s capital expenditures to decrease over this time, thanks to the company’s growing experience in its automotive production business. “Tesla’s increased experience with its production processes have significantly reduced the level of capital expenditures needed to support its growth plans, with annual CapEx falling from approximately $4 billion in 2017 to a current run rate of $1.5 to $2 billion, thus providing a significant boost to expected cash flow,” the firm noted.
Impressively, Moody’s noted that Tesla’s liquidity position is now “Adequate.” The company’s $5 billion in cash, for one, is expected to give the electric car maker a generous cushion to address maturing debt obligations through 2021, as well as address potential operational challenges that it could face in the coming year. Moody’s explains its positive outlook on Tesla’s liquidity as follows.
“Tesla has an adequate liquidity profile supported primarily by its $5 billion cash position. After giving consideration for approximately $1 billion in cash needed to fund normal ongoing operations, and $566 million to cover a November 2019 convertible note maturity, Tesla has incremental liquidity of approximately $3.4 billion. This affords the company an important cushion to contend with potential stress arising from softness in US demand, operational challenges accompanying its European and Chinese expansion plans, and the time that will be necessary to implement additional efficiency-enhancing initiatives,” the firm noted.
Nevertheless, Moody’s argued that Tesla still has notable areas of improvement, particularly in terms of its corporate governance. The firm cites the significant turnover of the company’s senior management ranks including JB Straubel’s recent decision to step aside from his CFO post; the actions of Elon Musk which have resulted in conflicts against the Securities and Exchange Commission; and a board of directors that has “not demonstrated meaningful oversight over the CEO’s activities” as areas of improvement for the electric car maker. While Tesla has been making efforts to improve this, such as the appointment of two new members of its board, Moody’s argues that “Tesla retains a very weak corporate governance structure” nonetheless.
Tesla’s updated rating with Moody’s could be upgraded or downgraded in the future, depending on the company’s performance. The firm noted that it could upgrade Tesla further if the company could demonstrate “sustained profitability and positive free cash flow in the face of rapid expansion plans in Europe and China,” as well as a capability to maintain an adequate liquidity profile. On the other hand, Tesla’s rating could be lowered if demand for its vehicles begins to soften in the United States, or if the company makes missteps in its China and Europe ramp. A downgrade could also happen if Tesla is unable to remain on a clear path towards strengthening margins in its automotive business, while narrowing losses in its other endeavors.
Moody’s full report on Tesla’s recent upgrade could be accessed here.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla’s flying Roadster just revealed something bigger than the car
Analysts say the Roadster demo puts a Tesla and SpaceX merger back on the table.
The Roadster unveiling near Waco ended Thursday night, and by Friday morning much of the investor reaction had less to do with the car than with who owns the rocket technology inside it.
Wedbush analyst Dan Ives said the event “puts the Tesla/SpaceX relationship on the table in a tangible way,” pointing to the propulsion, pressure vessel and control hardware sitting on a Tesla product. Gene Munster of Deepwater Asset Management called the demo “a ridiculous display of engineering” with “no commercial value” beyond embarrassing traditional automakers, though he said it showed Musk wants the two companies together.
The more specific forecast came a day earlier from Barclays. Analyst Dan Levy told clients a deal could be announced before Tesla’s annual meeting, which must happen by December 6, and that an announcement in late October or early November could make shareholder approval harder. Barclays expects SpaceX to be the buyer in an all stock deal, with Tesla holders receiving SpaceX shares at a premium, based on market values of roughly $2.1 trillion for SpaceX and $1.5 trillion for Tesla. If nothing lands around the meeting, the bank still sees an announcement within 6 to 12 months.
The Roadster demo just added more weight to merger speculations. Tesla’s demo used cold gas thrusters and pressure tanks of the kind SpaceX uses on Falcon 9, and Musk described the car as a collaboration between Tesla and SpaceX engineers, as we mentioned in our breakdown of the three Roadster configurations.
Musk has not publicly addressed a deal since the event, as far as we have seen. His most direct answer remains the one he gave at the All In Summit, when he said that with so much collaboration, “who can imagine what action one might take” without ruling anything out. Ives has held to a 2027 timeline since his March note, and Musk pushed back on the China piece of the speculation when ARK floated a year end announcement in August.
The next test is Tesla’s third quarter earnings call on October 21. However, we recall in July that Musk told analysts, “we can’t talk about combining companies and that kind of thing on an earnings call,” so a clear answer wouldn’t be expected.
Elon Musk
Elon Musk breaks his silence on the Starlink impact to Ukraine drones
Musk says the US military and president set Starshield limits, not SpaceX, amid Ukraine complaints.
Elon Musk says the speed limit cutting out Ukraine’s military Starlink terminals is not SpaceX’s decision. In a post on X Wednesday, Musk wrote that “Starshield systems are owned and controlled by the US government. Any limits on speed or usage are decided by the US military and ultimately POTUS.” He added that Starlink is a commercial service limited to civilian or defensive activities and “cannot be used for offensive military action, as doing so would be inappropriate for a commercial company.”
He was replying to Mykhailo Fedorov, Ukraine’s former defense minister, who had thanked Musk for restoring connectivity at speeds up to 160 km/h and said removing the Starshield limit entirely is “now critical for Ukraine’s defense.”
Starshield systems are owned and controlled by the US government. Any limits on speed or usage are decided by the US military and ultimately POTUS.
Starlink is a commercial service owned and controlled by SpaceX. Usage of Starlink is limited to civilian or defensive activities and cannot be used for offensive military action, as doing so would be inappropriate for a commercial company.
— Elon Musk (@elonmusk) October 14, 2026
The complaint started Tuesday night, when Ukrainian officials said military terminals began losing service above roughly 100 mph. Presidential adviser Serhiy Beskrestnov said the defense forces got no warning and several missions were disrupted, as Teslarati reported earlier Wednesday. The 7th Rapid Reaction Corps told Reuters connections dropped for 10 to 20 seconds at speeds well below the limit, which made drones harder to control. Poland’s foreign minister, Radoslaw Sikorski, asked Musk on X whether he is “playing politics with your products again.”
That is why the Starlink and Starshield distinction matters. SpaceX introduced Starshield in 2022 as the government version of Starlink, with an initial focus on Earth observation, communications and hosted payloads. It won a Space Force contract in 2023 with a $70 million ceiling. In December 2024, the Pentagon moved Ukraine’s terminals onto Starshield, covering about 3,000 units across two contracts. Ukraine’s military connections therefore run through a service that Musk now says sits under Washington’s control.
While Musk’s post describes who holds authority, it does not infer that anyone ordered the limit, and neither SpaceX nor the US government has confirmed who set it. Ukrainian officials have pointed to the timing, which follows President Trump’s push for an energy ceasefire and Musk’s Saturday post that “Zelensky has gone too far.” The BBC noted Trump denied threatening to restrict intelligence sharing with Kyiv, and no evidence has been presented that Washington requested the cap.
The episode also revives a promise from 2025. After Poland accused him of threatening Ukraine’s access, Musk said Starlink “will never turn off its terminals” and would not be used as a bargaining chip. Poland has since supplied more than 29,000 terminals to Ukraine. Teslarati also covered Kyiv’s search for Starlink alternatives in 2025, and the latest dispute gives that search new urgency.
Investor's Corner
Tesla opens the Q&A for its biggest earnings call yet
Tesla opens its Q3 earnings Q&A, and Cybercab, Robotaxi, Optimus and regulators loom over October 21.
Tesla has opened its shareholder question portal for the Q3 2026 earnings call, with the Say Q&A page already listing questions. Investors have until 4:00 p.m. EDT on October 20 to submit and vote on what management should answer.
The call is set for Wednesday, October 21. Tesla will post results after the market closes, with a live webcast at 4:30 p.m. CT, or 5:30 p.m. ET, through its investor relations site.
Say ranks questions by the number of shares behind the votes, which gives institutional holders extra weight over the retail crowd.
Ahead of Q2, retail investors asked why Robotaxi growth had stalled, when Cybercab would start customer rides, and where the Optimus Gen 3 ramp stood, while an institutional holder asked how Tesla and SpaceX would split Terafab duties. Cybercab has since answered one of those. Tesla said last week it has 300 plus Cybercabs serving Austin, up eightfold in 30 days, with Dallas named as the next city. The questions now are likely to move from when to how fast.
There is also a regulatory question hanging over the call. NHTSA has demanded sworn answers on how the pedal free Cybercab was certified against federal safety standards, with responses due October 30, nine days after the call. Whether an analyst raises it live is unknown, but it is the kind of exposure that tends to find its way into a Q&A.
The numbers will not be the main draw. Tesla already reported 486,532 deliveries and 13.7 GWh of storage for the quarter. Consensus sits around 43 to 45 cents per share on roughly $27.8 billion in revenue, according to Zacks, after a Q2 report that missed on EPS. Goldman Sachs, which holds a Neutral rating and a $360 target, argues the outlook for Robotaxi, FSD and Optimus will matter more to the stock than the quarter itself.
The call also lands six days after the rescheduled Roadster event, which Tesla will stream on X on Thursday, October 15, at 7:55 p.m. CT. If the Roadster shows up with a production date or a SpaceX thruster package, expect it to climb the voting list before the deadline.
Tesla Roadster owners to get “Flying Stunt Mode” and looping track access
How to use Grok Bot to block spam calls and texts
Tesla’s flying Roadster just revealed something bigger than the car
SpaceX reveals how its 1 Million AI satellite network will work and prevent space collisions
Elon Musk’s Boring Company lands a new Middle East deal, and Nashville is about to get faster
