A margin so thin it raises questions about what's really being paid for
Tesla New Zealand's 2025 accounts reveal a subsidiary that grew impressively on paper — automotive sales rising nearly 29 percent and energy revenue sixfold — yet retained only $284,000 in profit while routing hundreds of millions offshore to Netherlands and Australian entities. The arrangement, common among multinationals, has drawn the attention of tax analysts who question whether embedded brand royalties are flowing invisibly through purchase invoices, untaxed. It is a familiar modern parable: revenue as spectacle, profit as discretion, and the gap between the two as a question regulators are only beginning to ask.
- Tesla NZ's energy division exploded from $19.2m to $119.2m in a single year, suddenly dwarfing the automotive business that most people associate with the brand.
- Despite a combined revenue surge, the company declared just $284,000 in profit — less than the year before — and paid $385,000 in income tax on hundreds of millions in turnover.
- $198.5m flowed to Tesla Netherlands and $9.2m to Tesla Australia, leaving tax analysts questioning whether hidden royalty payments are escaping New Zealand's withholding tax net.
- A former Inland Revenue investigator points to Tesla NZ's 1.7% operating margin as suspiciously thin compared to Toyota NZ's 6–7%, suggesting the pricing structure may be doing quiet work.
- Locally, Tesla is investing — a new 18,000-square-metre Auckland showroom and the debut of Full Self-Drive — even as it extracts nearly all earnings from the market.
- Globally, Chinese EV rivals, a sliding share price, and Musk's political turbulence cast long shadows over whether any New Zealand momentum can hold.
Tesla New Zealand's 2025 financial accounts tell two stories simultaneously: a business recovering from prior weakness, and a corporate structure that raises questions about where its earnings actually land.
The headline numbers are striking. Automotive revenue climbed to $135.7 million, with Model Y sales reaching 6,878 units. But the real revelation was energy — solar and battery storage revenue leapt from $19.2 million to $119.2 million, a sixfold surge that made the car business look modest by comparison. Regulatory credits added another $16.5 million, while services revenue barely moved.
Yet Tesla New Zealand kept almost none of it. The company posted a profit of just $284,000 — down from $457,000 the year before — while sending $198.5 million to its Netherlands parent and $9.2 million to Tesla Australia. Income tax paid: $385,000.
Nick Miller, a tax reform advocate and former Inland Revenue investigator, found the operating margin of 1.7 percent difficult to explain for a company with exclusive rights to import a premium brand. Toyota New Zealand, using a comparable direct-sales model, runs at 6 to 7 percent. Miller raised the possibility that royalties for use of the Tesla brand may be embedded invisibly in purchase invoices flowing to the Netherlands — payments that, if declared separately, would likely trigger non-resident withholding tax. His concerns sit alongside a Reuters investigation finding Tesla paid US federal tax in only one of the past 20 years while booking $18 billion in profits through Singapore and the Netherlands, though no laws were found to have been broken.
Locally, Tesla is not standing still. A new 18,000-square-metre showroom opened at Westgate in Auckland, and Full Self-Drive arrived in New Zealand for the first time — though early users noted the AI's uncertain relationship with roundabouts. Globally, however, the pressures are significant: Chinese rivals BYD and Geely now lead EV sales by some measures, Tesla's share price remains below its 2021 peak, and Musk's political volatility has unsettled the brand's traditional base. Whether New Zealand's energy boom endures — and whether its tax arrangements attract closer regulatory attention — are the two questions now hanging over the subsidiary's next chapter.
Tesla New Zealand's financial recovery in 2025 tells two stories at once: a business bouncing back from weakness, and a corporate structure that funnels nearly all its earnings offshore in ways that have begun to draw the attention of tax analysts.
The numbers on the surface look encouraging. Automotive revenue climbed to $135.7 million from $107 million the year before, a jump of nearly 29 percent. The Model Y, Tesla's workhorse sedan, sold 6,878 units in 2025, up from 6,360 in 2024. The cheaper Model 3 went the other direction—320 units sold versus 461 the prior year—a sign that the company's entry-level offering is losing ground even as the premium model gains it.
But the real surprise was energy. Revenue from solar generation and battery storage exploded from $19.2 million to $119.2 million, a sixfold increase that dwarfed the automotive business's modest growth. Regulatory credits—payments from governments for meeting emissions targets—added another $16.5 million to the top line, up from $10.1 million. Services revenue barely moved, staying flat at $13.8 million.
Yet when you look at what Tesla New Zealand actually kept, the picture becomes strange. The company reported a profit of $284,000 for the year, down from $457,000 in 2024. It is a 100-percent-owned subsidiary of Tesla Netherlands, which is itself owned by Tesla Inc in the United States. And nearly all of the revenue that flowed in flowed right back out again—$198.5 million went to Tesla's Netherlands operation, and another $9.2 million to Tesla Australia. The company paid $385,000 in income tax.
Nick Miller, a tax reform advocate and former senior manager at EY in Britain who later worked as an investigator for Inland Revenue New Zealand, looked at these accounts and saw something worth questioning. He noted that Tesla's overall operating margin for 2025 was 1.7 percent—a figure he described as astonishingly low for a company with exclusive rights to import and sell a premium product. Toyota New Zealand, which uses a similar direct-sales model, operates at a 6 to 7 percent margin. Most other motor vehicle distributors in the country exceed Tesla's return, with only Ford coming close to such thin margins.
Miller raised the possibility that embedded royalties—payments for the use of the Tesla brand itself—might be flowing through the Netherlands purchase invoices without being separately declared. If such royalties were itemized, he suggested, the company would likely owe non-resident withholding tax of at least 5 percent. He also pointed to a Reuters investigation published earlier in May that found Tesla had paid federal tax in the United States for only one of the past 20 years while reporting $18 billion in profits in Singapore and the Netherlands. Reuters found no evidence that Tesla broke any laws, and noted that profit-shifting is common among multinational corporations.
Locally, 2025 brought some genuine momentum. The Full Self-Drive feature—Tesla's advanced driver-assistance system—became available in New Zealand for the first time in the second half of the year, though early adopters reported some awkward moments as the AI learned to navigate roundabouts. The company also opened a new 18,000-square-meter showroom and service center called Tesla North at Westgate in Auckland's northwest earlier this year. These moves suggest a company investing in its local presence even as it extracts nearly all its earnings.
Globally, Tesla faces headwinds that dwarf any local success. Chinese competitors BYD and Geely have become the world's largest EV sellers by some measures. The company's share price closed today at $398.73, below its 2021 peak of $407.36. Musk's political entanglements—first leading a Trump administration cost-cutting effort, then falling out with the president—have created unpredictable swings in the company's reputation among its traditional customer base. Tesla recently announced plans to discontinue both the Model 3 and the high-end Model X to free up factory capacity for robo-taxis and humanoid robots. In the first quarter of 2026, total revenue came in at $22.4 billion, better than expected but still below the $24.9 billion and $25.2 billion posted in the fourth and third quarters of 2025. The question now is whether New Zealand's energy boom can sustain itself, and whether the company's tax structure will face closer examination from regulators who have begun to notice.
Citas Notables
Tesla's return is astonishingly low for a company with exclusive rights to import and sell a premium product— Nick Miller, tax reform advocate and former Inland Revenue investigator
Tesla would hardly be the first company to shift profits overseas— Reuters investigation cited in reporting
La Conversación del Hearth Otra perspectiva de la historia
Why does a company report $255 million in revenue but keep almost nothing?
Because it's structured to buy from itself. Tesla New Zealand buys vehicles from Tesla Netherlands at a price that leaves almost no margin. The money flows in and flows out in the same breath.
Is that illegal?
No one's saying it is. But a tax analyst looked at the accounts and noticed the margin is suspiciously thin—1.7 percent when similar companies operate at 6 or 7 percent. That gap is where the question lives.
What's the gap hiding?
Possibly royalties for using the Tesla brand. If you're selling a product under a brand name, someone has to pay for that right. The question is whether that payment is hidden inside the purchase price or declared separately.
And if it's hidden?
Then Tesla might owe withholding tax it hasn't paid. But proving that would require regulators to dig into the invoices and the transfer pricing between the subsidiaries.
Does this happen elsewhere?
Reuters found that Tesla paid U.S. federal tax in only one of the past 20 years while reporting $18 billion in profits overseas. The company isn't alone in doing this, but it's also not invisible anymore.
So what changes?
That depends on whether New Zealand's tax authorities decide to look closer. For now, the energy business is booming and the company is investing locally. But the structure itself—the way money moves through the Netherlands to avoid taxation—that's what's drawing attention.