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New Tesla factory near Berlin to create ‘up to 10,000 jobs’

A new Tesla auto factory is to be built near Berlin, Elon Musk announced. What does it all mean?

New Tesla factory near Berlin to create 'up to 10,000 jobs'
Elon Musk at Germany's Golden Steering Wheel awards on Tuesday in Berlin. Photo: DPA

What's happening?

On Tuesday evening, technology entrepreneur, investor, and engineer Musk revealed during a ceremony at Germany's Golden Steering Wheel awards that the new “Gigafactory” for electric cars and batteries would be “in the Berlin area.”

The 48-year-old said the electric car maker planned the facility “near the new airport” in Berlin-Brandenburg.

“Everyone knows that German engineering is outstanding and that's part of the reason we are locating our Gigafactory Europe in Germany,” he said at the awards run by Bild am Sonntag and Auto Bild.

“We will definitely have to put in a higher pace than the airport,” Musk added, referring to the notorious delays of the building of Berlin's BER airport.

He said the firm planned to set up a design hub in the capital.

“We are also going to create an engineering and design centre in Berlin because I think Berlin has some of the best art in the world,” Musk said.

The news highlights a further global expansion for the firm, which last month said its factory in China had started production.

Musk offered few details, but reports have said the company hopes to begin European production by 2021. “Giga Berlin,” Musk tweeted, bookending the words with heart emojis.

“Will build batteries, powertrains & vehicles, starting with Model Y,” he added in another tweet.

Tesla is estimated to have some 30 percent of the European market for battery-powered cars.

READ ALSO: New Tesla factory to be built near Berlin

How many jobs will be created?

According to Bild, up to 10,000 jobs will be created. However, other estimates have been slightly less. The Berlin government on Wednesday said the factory would create up to 7,000 positions.

The new factory is to be built on an industrial site in Grünheide, Brandenburg, in the Oder-Spree district southeast of Berlin, according to Berlin daily Tagesspiegel.

A BMW plant had already been considered for this site. But now a direct competitor to BMW's popular 3-series is likely to emerge there – with German technology. Three years ago, Tesla bought the German machine manufacturer Grohmann, which specializes in production lines.

Other federal states – including Saarland and Lower Saxony – were also initially in discussion as possible sites for the new Tesla factory.

In fact, very few people had considered the Berlin-Brandenburg area, according to Spiegel.

Elon Musk in Berlin on Tuesday. Photo: DPA

Is this important for Germany?

Yes. Musk's announcement is good news for the German auto industry, according to professor Ferdinand Dudenhöffer of the Center for Automotive Research at the University of Duisburg-Essen.

Tesla producing electric cars in Germany could wave a checkered flag at the local competition, such as Volkswagen, BMW, and Daimler, speeding up innovation in the sector there, Dudenhöffer said.

However, Dudenhöfer also urged people to be cautious when talking about job creation estimates. He said: “Cell production is highly automated. Energy costs are far more important than labour costs.”

Tesla is already looking for employees for the factory in Germany on its vacancies page.

According to “Manager Magazin”, Elon Musk had already confirmed at the presentation of the Tesla figures for the third quarter of 2019 that his company wanted to build a factory in Europe. At that time it was only stated that the location would be announced before the end of the year.

The factory in Germany is expected to go into operation at the end of 2021.

What are politicians saying?

The news has been welcomed, especially in the eastern German state of Brandenburg which surrounds Berlin. State premier Dietmar Woidke told DPA: “This is excellent news for our state. We have worked hard to achieve this during intense talks and with good arguments. I am happy that Elon Musk has chosen Brandenburg as the location.

“The Giga factory will give Brandenburg a further boost as an innovative and international location and will give many people a good job.”

Berlin's Economics Senator Ramona Pop of the Greens said: “Those who have visions come to Berlin. Welcome to the metropolitan region, Tesla!”

What else do we know about Tesla?

Tesla, which has set the pace for electric mobility since it was founded by Musk in 2003, last month announced that it posted a profit in the recently ended quarter instead of taking a loss as analysts expected.

Tesla said it is producing vehicles “on a trial basis” at its recently opened “Gigafactory” in Shanghai, which will help boost global production and sales.

Musk was optimistic that the Shanghai factory could begin cranking out Model Y vehicles by the middle of next year, and believed the new model has the potential to be a huge seller.

The company has been dogged by concerns it may not be able to ramp up production to meet demand and that Musk may have overstated Tesla's goals for sales and technology improvements.

Musk expected the Shanghai factory to hit “volume production” in a few months, and that it could be possible to significantly ramp up Tesla production. He noted that a battery plant was also being built on the Chinese site.

Tesla's first “Gigafactory” was constructed in the US state of Nevada, and its vehicles are built mostly at a factory in Northern California.

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WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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