Musk Says Tesla’s Credit Rating Makes No Sense After SpaceX Gets a Higher One

Moody’s just handed SpaceX a first-time Baa1 issuer rating with a stable outlook. Tesla, the company Elon Musk runs that actually sells things to consumers at scale, is still sitting at Baa3.

Both are investment grade. But SpaceX now ranks two notches above Tesla, and Musk did not let that pass quietly.

His response was short and direct. He said the math makes no sense given what Tesla has on its books.

Yeah, makes no sense.

Tesla has over $40B in cash, no debt and is consistently profitable!

— Elon Musk (@elonmusk) June 19, 2026

The numbers behind his complaint are not hard to find. They are in Tesla‘s own Q1 2026 Update.

The company reported $44.7 billion in cash, cash equivalents, and short-term investments at quarter end. It also reported $3.9 billion in operating cash flow and $1.4 billion in free cash flow for the quarter.

The same filing showed $0.5 billion in GAAP net income and $1.5 billion in non-GAAP net income. Cash and investments rose by $0.7 billion during the quarter, helped by free cash flow and a financing inflow, and partly offset by a $2.0 billion equity investment in SpaceX.

So when Musk says Tesla has the cash, no debt, and consistent profits, the company’s own report backs the framing. That is the heart of his argument: a balance sheet this strong does not look like the weakest rung of investment grade.

Teslarati laid out the setup that triggered Musk’s reply. The report says SpaceX received its first-time Baa1 issuer rating with a stable outlook while Tesla remained at Baa3, putting Musk’s two biggest companies side by side on Moody’s scale.

The article also explains why the comparison landed with Tesla fans. Moody’s leaned on SpaceX’s orbital-launch leadership, Starlink’s recurring revenue, vertical integration, U.S. government contracts, and new AI infrastructure opportunities.

For Tesla, the same debate turns back to what Musk highlighted: a huge cash position, no debt in his telling, and continuing profitability. That makes the story less about one social-media jab and more about how rating agencies compare a mature EV and energy company against a fast-growing private space and connectivity giant.

The case for SpaceX, to be fair, is not flimsy. The rating agency had real reasons.

Investing.com reported that Moody’s assigned SpaceX the Baa1 long-term issuer rating with a stable outlook. The report says Moody’s pointed to SpaceX’s leading orbital-launch position, Starlink’s role as the largest low-Earth-orbit broadband network and its main cash generator, and the company’s vertical integration across manufacturing, launches, satellite deployment, and customer delivery.

It also said SpaceX serves as a primary launch provider for NASA and the Defense Department, giving the company government-contract visibility that a rating agency can model. Moody’s also credited AI compute contracts, including large third-party arrangements, as part of the company’s upside.

The same report noted the limits Moody’s saw. It flagged execution risk, heavy capital intensity, and sustained negative free cash flow tied to SpaceX’s AI infrastructure buildout, with about $23.7 billion in cash and marketable securities as of March 31.

🚨 SpaceX received an investment-grade credit rating of Baa1 from Moody's, slightly higher than Tesla's Baa3 rating.

Moody's assigned SpaceX a Baa1 issuer rating with a stable outlook, praising its dominant position as the world's leading orbital launch provider and operator of… https://t.co/iLdUiZsHyK pic.twitter.com/8yG5gZlliP

— TESLARATI (@Teslarati) June 19, 2026

The part worth chewing on is that Moody’s did not ignore Tesla’s strengths either.

Investing.com reported in May that Moody’s affirmed Tesla’s Baa3 with a stable outlook and credited the company’s technology, EV leadership, robust liquidity, and strong balance sheet. It then said automotive headwinds and margin pressure remained part of the credit picture.

So Moody’s acknowledged the same liquidity Musk is citing. It simply put more weight on the cyclical, lower-margin nature of selling cars than on the cash pile.

That is the real disagreement here. A rating agency looks at the auto business as a margin risk, while Musk looks at a debt-free company sitting on more than $40 billion and asks how that earns a lower grade than a launch company burning cash on AI buildout.

Neither side is calling the other a fraud, and nobody should. One method rewards recurring contract revenue and forgives heavy spending tied to growth.

The other waits to see how the car market treats Tesla’s margins.

For Tesla shareholders, the takeaway is simpler than the rating ladder suggests. The company Musk is defending has the balance sheet to back the argument, and the filing proves it.