In a significant boost to Tesla’s financial standing, Moody’s Investor Service has announced that it has upgraded the automaker’s credit rating from junk status to investment-grade status. The credit rating agency raised Tesla’s long-term issuer rating by one notch, moving it from “Ba1” to “Baa3,” indicating moderate credit risk.

Moody’s is one of the leading providers of credit ratings, research, and risk analysis. Its long-term obligation ratings are opinions of the relative credit risk of fixed-income debt with an original maturity of one year or more. Moody’s rival, Standard & Poor’s, upgraded its credit rating for Tesla from “BB+” to “BBB” last October, citing the automaker’s improving production and solid cash flow prospects.

The New York-based credit rating agency also withdrew the Ba1 corporate family rating, which indicates junk status, along with the Ba1-PD probability of default rating and SGL-1 speculative grade liquidity rating. The outlook for Tesla’s credit rating is “stable,” indicating a low likelihood of a rating change over the medium term.

Moody’s upgrade reflects the agency’s expectation that Tesla, led by CEO Elon Musk, will continue to be one of the foremost manufacturers of battery electric vehicles with an expanding global presence and very high profitability. The agency also took into account the Austin, Texas-based company’s financial policy and management’s operational track record.

The credit rating upgrade is a significant achievement for Tesla, which has faced scrutiny from investors and analysts over its finances and profitability. The move is likely to boost investor confidence in the automaker and could lead to lower borrowing costs for Tesla in the future.