(Bloomberg) -- Elon Musk-loving stock traders are famously bullish on Tesla Inc., the eighth most-valued company in the world. Now credit-rating providers, playing catch-up, are giving heft to the automaker’s blue-chip valuation.

Moody’s Investors Service on Monday became the second credit ratings firm to endow Tesla with investment-grade status, upgrading the Austin-based firm’s credit score by one notch to Baa3. It follows a similar move by S&P Global Ratings in October. 

“Tesla will maintain its position as one of the leading manufacturers of battery electric vehicles, as the company further solidifies its global footprint,” Rene Lipsch, senior credit officer at Moody’s, wrote in the statement. 

The credit grader also cited the automaker’s expanding product offering, including early production of the Cybertruck slated for later this year, its regional production facilities and heightened focus on the efficiency and financial leverage that’s well below one time after Tesla repaid about $10 billion of debt in the last three years.

An email sent to the company requesting comment wasn’t returned. 

Tesla was already being treated like a blue-chip company by many investors and analysts. It secured a $5 billion revolving credit facility earlier this year, a sign that it was nearing investment-grade status. The electric vehicle firm has little outstanding debt, and its five-year credit-default swaps are already trading in line with high-grade borrowers, according to data compiled by Bloomberg. 

Moody’s uplift has both symbolic and practical value. Companies that rise from junk to investment grade typically benefit from cheaper financing by attracting a deeper pool of investors. And traditionally, a high-grade credential from at least two agencies is enough to be formally considered a blue-chip credit among ratings-sensitive investors.

“It’s a historic event for Tesla,” said Joel Levington, a Bloomberg Intelligence credit analyst. “We continue to believe the rating upgrade cycle for the company has legs, potentially narrowing views of credit risk against Volkswagen.”

Tesla’s stock, which plummeted in 2022, rose 1.7% on Monday to close at $183.3 and is up nearly 50% so far this year. The company became the first junk-rated company to have a market value of more than $1 trillion in October 2021. 

The electric-vehicle maker is the eighth largest company in the world by market cap, and its valuation helped turn Musk into one of the world’s richest people.

Tesla delivered over 1.3 million cars globally in 2022 and will report first quarter figures in early April. It has also paid down its debt while remaining the world’s leading maker of electric cars, and recently announced that its next auto plant will be in Mexico. The low financial leverage and best-in-class margins explain why ratings companies have steadily ratcheted up Tesla’s grade, BI’s Levington said in an interview in October.

(Corrects reference to year in final paragraph.)

©2023 Bloomberg L.P.