California May Exclude Tesla from Proposed Electric Vehicle Discount Program

Forex - Elon Musk's Tesla may miss out on lucrative tax breaks for electric vehicles considered by California's Democratic Governor Gavin Newsom.

The proposals announced by Newsom are part of an effort to isolate the governor from elected President Donald Trump, who is expected to eliminate the federal electric vehicle tax credit after taking office in January and has threatened to withdraw green subsidies from California.

Newsom stated that if Trump follows through on his promise to remove the $7,500 federal tax credit for purchased or leased vehicles, California, the most populous state in the country, will create its own plan.

Newsom added, "We are not going back to a clean transportation future—we will make it more affordable for people to use vehicles that do not pollute the environment."

A spokesperson for Newsom mentioned that the proposals could include a "market cap" element that would exclude large companies like Tesla in order to encourage smaller and newer electric vehicle manufacturers, although specific details will be subject to negotiation with the California legislature.