Fitch Ratings awarded Tesla's “BBB” long-term issuer a default rating for the first time, and the outlook is stable. The agency notes that this rating reflects Tesla's strong market position as a global leader in pure electric vehicles and its strategic focus on transforming into a physical artificial intelligence company. Fitch expects its pure electric vehicle business to continue to have strong profitability, but profit margins are likely to decline in the next few years as the company rapidly ramps up significant investments in artificial intelligence. These investments will also require a significant increase in capital expenditure, which may drive free cash flow to negative in the medium term. This heavy investment cycle is likely to increase the company's debt. Fitch expects Tesla's capital expenditure to exceed $25 billion in 2026, more than three times the level in 2025, and R&D spending will also increase. Much of this expenditure will support the construction and training of the Cortex 2 artificial intelligence supercomputer, which is the foundation of Tesla's future FSD, Robotaxi, and Optimus humanoid robot plans.

Fitch Ratings awarded Tesla's “BBB” long-term issuer a default rating for the first time, and the outlook is stable. The agency notes that this rating reflects Tesla's strong market position as a global leader in pure electric vehicles and its strategic focus on transforming into a physical artificial intelligence company. Fitch expects its pure electric vehicle business to continue to have strong profitability, but profit margins are likely to decline in the next few years as the company rapidly ramps up significant investments in artificial intelligence. These investments will also require a significant increase in capital expenditure, which may drive free cash flow to negative in the medium term. This heavy investment cycle is likely to increase the company's debt. Fitch expects Tesla's capital expenditure to exceed $25 billion in 2026, more than three times the level in 2025, and R&D spending will also increase. Much of this expenditure will support the construction and training of the Cortex 2 artificial intelligence supercomputer, which is the foundation of Tesla's future FSD, Robotaxi, and Optimus humanoid robot plans.