SHARE
COPY LINK

JOBS

What does Tesla’s Berlin touchdown mean for German carmakers?

Hopes are high that US electric pioneer Tesla's first European factory just outside Berlin will boost German carmakers, but it also ups the pressure on homegrown manufacturers to raise their battery-powered game.

What does Tesla's Berlin touchdown mean for German carmakers?
Elon Musk earlier this year. Photo: DPA

Elon Musk's Tuesday announcement that his Californian firm is coming marks the first foreign car company setting up shop in Germany “in decades,” said analyst Stefan Bratzel of the Center of Automotive Management — “symbolic for the new world and the reordering of the industry.”

Economy minister Peter Altmaier trumpeted “a great success,” saying Germany had prevailed in “intense competition” with other European countries.

Musk unveiled Tesla's European touchdown at an industry event in Berlin, saying he had picked a site in Brandenburg for the factory, which is expected to bring roughly 7,000 jobs.

Slated for an area southeast of the German capital, the plant “will build batteries, powertrains and vehicles, starting with Model Y” SUVs, Musk later tweeted.

Production is to start in 2021 at the earliest.

“I think it's a good thing, it will create jobs and electric cars are good for the environment,” said Mathias Wirth, who lives in Grünheide, set to host the Tesla plant.

“It's a big opportunity for people living here,” agreed fellow resident Iris Siebman.

READ ALSO: New Tesla factory near Berin to create 'up to 10,000 jobs'


This is where the Tesla factory is going to be built. Photo: DPA

'Pressure on the Germans'

Tesla accounts for almost one in three electric vehicles sold in western Europe, and worldwide sales of its Model 3 have already overtaken those of BMW's 3 Series sedans, although “German sales remain disappointing”, according to analyst Matthias Schmidt.

Electric vehicles more broadly have fallen short of ambitions, with Chancellor Angela Merkel this year targeting one million on the road by 2022 – two years later than she had previously aimed for.

“Elon Musk's decision in favour of Germany… adds more momentum to electric mobility than 100 summits called by the chancellor,” said Ferdinand Dudenhöffer, head of the University of Duisburg-Essen's Center for Automotive Research.

“Competition has always made people better and faster, so it's good news for Volkswagen, BMW and Daimler too,” he added.

But there is also no doubt Musk's move “puts pressure on the Europeans and the Germans,” said Christoph Schalast, professor at the Frankfurt School of Finance and Management.

German giants are behind in adapting fleets to meet new European emissions limits, and have left it until late to commit to electric drive in a big way.

In the near term, bosses “won't be losing too much sleep, but the danger is if they wait too long with their own credible electric vehicle offerings, they may begin to lose some of their credibility,” analyst Schmidt said.

The map below shows where the factory is going to be built.

A German car industry source told AFP they were relaxed about Tesla's announcement, hoping the competitor's arrival would accelerate the country's electric transition.

'Made in Germany'

On stage Tuesday, Musk hailed “outstanding” German engineering as one factor playing into the choice for Berlin.

The capital can lend “creativity” and English-speakers, “the engineering and programming hipsters,” while Brandenburg offers “a lower than average paid workforce in the former East Germany” and space to expand.

But Schmidt warned the Californian risks running into “bureaucratic hell” in Germany, with Musk's new site just a few kilometres (miles) from the Berlin-Brandenburg airport.

The planned hub is almost a decade behind schedule, largely down to problems with its fire suppression system.

Even without such dramatic delays, Tesla is unlikely to throw together a factory in the one year its new Chinese site required.

Work is to start in early 2020 with a budget of several billion euros (dollars), Brandenburg's economy minister was quoted by the news agency DPA as saying.

By Florian Cazeres with Yann Schreiber in Frankfurt

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

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. 

SHOW COMMENTS