Tesla is now a blue chip stock from a corporate debt perspective after Moody’s Investors Service upgraded the EV maker’s credit rating from junk status to investment-grade quality.

Moody’s analysts upgraded Tesla’s credit rating to Baa3, the first rung on its investment-grade ladder, from Ba1, its top rating for high-yield corporate debt.

“The rating action reflects Moody’s expectation that Tesla will remain one of the foremost manufacturers of battery electric vehicles with an expanding global presence and very high profitability,” the analysts wrote in a note.

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“The upgrade also incorporates governance considerations, including Tesla’s prudent financial policy and management’s operational track record.”

The analysts also amended their outlook from ‘Positive’ to ‘Stable’ on their expectation that Tesla will continue to capitalize on robust growth in global demand for battery electric vehicles but in an increasingly competitive environment.

The news impressed investors, with Tesla adding 6.7% at US$195.53 in New York on Tuesday afternoon.