Tesla Motors Inc (NASDAQ:TSLA) received a blow from Standard & Poor on Tuesday, as the agency assigned the company a junk rating citing “considerable uncertainty” about its long-term prospects. Tesla got an unsolicited B- ranking,  which is six levels below the investment grade reflecting a business “constrained by Tesla’s niche and independent market position,” according to world’s largest credit rating agency S&P.

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Uncertain long-term prospects

S&P analysts Nishit Madlani and Dan Picciotto said, “We believe there is considerable uncertainty in Tesla’s long-term prospects.” Both added that in comparison to the big rivals, Tesla Motors Inc (NASDAQ:TSLA) is still not ready to adapt a competitive and technological displacement risks over the medium to long-term.

Also, the agency noted in its report that the company operates on a smaller scale compared to its rivals, along with a narrower product portfolio and limited demand for its products.

Liz Jarvis-Shean, a spokeswoman for Tesla Motors Inc (NASDAQ:TSLA), wrote in an e-mailed statement that the rating was developed independently by the analysts without any feedback from the company on its growth plans.

Bloomberg gathered data about Tesla Motors Inc (NASDAQ:TSLA) when it noticed that the United States automaker had entered the debt market without a ranking from any of the major credit rating agencies.  CEO Elon Musk raised around $2.3 billion in March by selling convertible debt to build a facility for ramping up battery production. The share price of the EV car manufacturer surged fourfold last year.

Demand slowing for Tesla Model S

Tesla Motors Inc (NASDAQ:TSLA) share growth has declined this year after the company released Model S sales data this month, which were lower than analyst’s expectations. It is widely anticipated that the demand for Tesla is declining, because even though delivery time remains stable, deliveries have been are dropping, according to Forbes.

The EV manufacturer is working on plans to increase production by buffing up the efficiency of the assembly line. For the first quarter, the company started producing 500 cars per week, but could reach up to 580. Over the first quarter 6,437 Model S were delivered which indicates that around 1000 of them were manufactured in the previous quarter. This implies that Tesla Motors Inc (NASDAQ:TSLA) will be able to ship the cars manufactured in the last three weeks in the next quarter with a delivery target of 7,500. The scenario reflects that the gap between the production and delivery time should be narrowed over the next quarter.