CREDIT APPROVAL MEMORANDUM

Borrower:	Tesla Inc.	Ticker:	TSLA
Sector:	Consumer Discretionary	Date:	2026-02-19
Internal Rating:	BB	Score:	60/100
PD Rating:	0.50% - Moderate	Regulatory:	Substandard

Executive Summary

This memorandum recommends approval of the proposed credit facility for Tesla Inc.. Tesla maintains industry-leading EV margins but faces increasing competition from Chinese OEMs. FSD technology remains a high-potential wildcard.

Key Credit Metrics

Metric	Value	Guideline/Covenant
Net Leverage (Debt/EBITDA)	3.7x	< 3.5x
Interest Coverage (EBITDA/Int)	7.0x	> 5.0x
Liquidity Score	58.2	> 70

Financial Analysis

Revenue & Earnings: The company generated $308.6B in revenue in 2024, with EBITDA of $103.8B. Forecasts indicate continued growth.

Liquidity: The company maintains a strong liquidity profile with access to capital markets and revolving credit facilities.

Cash Flow: Free Cash Flow conversion remains strong, supporting debt service and capital returns.

Risk Factors

Price cuts to maintain volume are compressing margins. Key man risk regarding leadership bandwidth is a persistent investor concern.
Macroeconomic headwinds impacting consumer spending.
Technological disruption from competitors.

Recommendation

Approve. The risk/reward profile is favorable.

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Credit Officer