Electric car maker Tesla given ‘junk rating’

Electric car maker Tesla has been given a ‘junk’ rating,
despite its Model S car being named fastest green car.

AFP reports that Standard & Poor’s (S&P) gave the
company a ‘B-‘ grade with a stable outlook, citing the fact that there
is still a limited market for its cars and that more competitors are likely to
challenge in that market.

“We expect global competition for alternative fuel
vehicles to intensify over the next few years as competitors penetrate this
market through improved products,” S&P said in a statement.

“We believe there is considerable uncertainty in
Tesla’s long-term prospects and believe that the company is less likely
(compared to larger, more established automakers) to successfully adapt to
competitive and technological displacement risks over the medium to long
term.”

One factor on Tesla’s side is Tesla founder Elon Musk’s plan
to build a $US5 billion ($5.41bn) battery factory which promises to cut the
cost of producing lithium-ion auto batteries.

Meanwhile, as Zacks reports, the Automobile Association of
America (AAA) gave Tesla’s Model S top points in its Green Car Guide.

According to the guide, the Tesla S is the fastest green car
available, but has a low range of 426 km and a long charging time.

The AAA reviews 80 hybrid vehicles annually for Its Green
Car Guide. It looks at hybrids vehicles, electric cars, CNG-powered cars, clean
diesels and partial zero emissions vehicles.