California judge rules Tesla’s Autopilot, Full Self-Driving marketing deceptive; DMV threatens sales suspension

A California administrative law judge has ruled that Tesla’s marketing of its “Autopilot” and “Full Self-Driving” systems was deceptive, and recommended a 30-day suspension of the company’s licenses to sell and manufacture vehicles in the state, according to the California Department of Motor Vehicles.

The ruling follows formal accusations of false advertising filed by the California DMV against Tesla in 2022. The agency alleged that Tesla’s marketing suggested its vehicles were capable of autonomous operation, despite requiring a human driver to remain attentive and ready to intervene at all times.

Steve Gordon, director of the California DMV, said at a press conference on Tuesday that the department has adopted the judge’s order with a modified penalty. Under the revised approach, Tesla will be given 60 days to address and correct any deceptive or confusing claims related to its Autopilot and Full Self-Driving systems.

If Tesla fails to resolve the issues within that window, the DMV said it will proceed with a 30-day suspension of the company’s license to sell vehicles in California. However, Gordon clarified that the DMV will stay the portion of the judge’s order that would have suspended Tesla’s manufacturing license, meaning the company’s factory operations in the state will not be interrupted.

In the proposed order, the judge wrote that a “reasonable consumer likely would believe that a vehicle with Full Self-Driving Capability can travel safely without a human driver’s constant, undivided attention,” a belief the judge said is incorrect both technologically and legally. The use of the term “Full Self-Driving Capability,” the judge concluded, is misleading and violates California’s civil and vehicle codes.

Since the DMV’s accusations were filed, Tesla has renamed its premium driver-assistance package to “Full Self-Driving (Supervised).”

Tesla, in a statement emailed by public relations firm FGS Global, said the ruling was a consumer protection order focused on terminology and did not involve complaints from customers. The statement added that sales in California will continue uninterrupted.

The DMV did not cite consumer complaints in its original accusations. However, Tesla is currently facing a class action lawsuit in California’s Northern District from drivers who allege the company misled them for years about the self-driving capabilities of its vehicles.

Despite the regulatory action, Tesla’s stock closed at a record high on Tuesday, driven largely by investor optimism around the company’s plans for robotaxis and autonomous driving technology.