- In a management report for the 2019 fiscal year, which has only just been prepared, Tesla gives concrete figures on the business of its group subsidiary in Germany.
- With sales jumping to 671 million euros, Tesla Germany GmbH paid 3.8 million euros in taxes.
- Most of the money flows to the US parent company via a Dutch company.
- Visit the Business section of Insider for more stories.
Like many US tech companies, Tesla has its struggles with transparency. Reports with numbers and data on the business are a rarity. Business Insider has a management report from the company’s subsidiary Tesla Germany, which was published in February 2021 and highlights the 2019 fiscal year. It shows how Elon Musk’s company manages to ensure that the world’s most valuable automaker pays manageable taxes in Germany.
“We believe that our vehicles, our expertise in developing electric vehicles and our business model are different from established car manufacturers,” the report begins. By setting up its own network of sales and service centers and charging stations, Tesla Germany has accelerated the spread of electric cars, it says. The main task of the group subsidiary is to sell these cars, it said. “The most important key figures for us are (…) sales revenue as well as earnings before taxes,” the statement added.
According to the information, Tesla Germany delivered 11,300 cars in 2019 and generated 671 million euros in revenue (2018: 180 million euros). The main drivers were the market launch of the Model 3 and the halving of the company car tax for electric vehicles, it said.
Tesla Germany had to purchase every vehicle sold from a Tesla company in the Netherlands beforehand. Thus, of around 670 million euros, almost 540 million euros went directly back abroad. After further outflows to the shareholder, operating costs, and personnel expenses, earnings before taxes amounted to 9.8 million euros in the year under review. Accordingly, 3.8 million euros went to the German treasury. From Tesla Germany’s point of view, apparently still too much. “The high tax rate,” the company writes, “results, among other things, from trade tax additions as well as other useful lives for tax purposes.” The company has, however, refrained from any options to reduce the tax rate.
The information on employee costs is also interesting. Tesla Germany spent almost 18 million euros on wages and salaries in 2019. With a reported 355 employees, this makes a calculated average income of around 50,000 euros per worker. Whereby the bosses received no salary from Germany GmbH. “No remuneration was granted to the managing directors by the company in the year under review as compensation for the activities performed,” the report states. “The managing directors perform management activities for the shareholder or the ultimate parent company.”
While VW CEO Herbert Diess has warned of Tesla’s financial strength, the electric car maker is modest in the paper, which was published in the Federal Gazette in February.
“Most of our current and potential competitors have significantly more resources than we do and, as a result, in addition to other advantages, may be able to devote more resources to manufacturing, selling, and supporting their products,” the company writes. “However, we believe our specialization in electric vehicles and electric vehicle components, as well as our history of vehicle development and production, provide the foundation upon which we can compete in the global automotive market, despite challenges from our competitors.”
They said that while the coronavirus pandemic will have a global economic impact, there is no immediate threat to earnings “as demand for electric vehicles remains high due to incentive measures.”
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