California’s Department of Motor Vehicles has deferred an order that would have temporarily suspended Tesla’s manufacturing and sales licenses in the state, giving the electric vehicle maker additional time to address allegations that it misled consumers about its driver assistance technology.
The DMV had adopted a judge’s proposal to suspend Tesla’s manufacturing and sales licenses for 30 days but immediately placed the order on hold, DMV Director Steve Gordon said on Tuesday. Under the decision, the suspension of Tesla’s sales license has been stayed for 90 days, while the suspension of its manufacturing license has been deferred indefinitely.
The case dates back to 2022, when the DMV accused Tesla of misleading marketing practices related to the use of the terms “Autopilot” and “Full Self-Driving” (FSD). The regulator argued that the names falsely implied the vehicles were capable of autonomous operation. The DMV presented its case to Judge Juliet Cox of the Office of Administrative Hearings, who proposed the suspension later adopted by the agency.
Tesla has disputed the allegations. A lawyer for the company told the hearing that Tesla has “clearly and consistently” communicated that vehicles equipped with Autopilot and FSD require active human supervision and are not autonomous.
Gordon said the DMV decided to pause enforcement to give Tesla “one more chance to be able to remedy the situation,” adding that the agency hopes the company will correct what it considers misleading statements. To avoid the suspension, the DMV said Tesla must submit a statement confirming either that it has stopped using the Autopilot name for its driver assistance software or that its vehicles can operate without active human monitoring.
Tesla has until February 14 to appeal the decision or seek judicial review, the DMV said.
In a statement, Tesla said the order was related to consumer protection concerns over terminology and said sales in California would continue without interruption. The company did not specify whether it plans to stop using the Autopilot name or pursue an appeal.
The decision comes as Tesla and other automakers face slowing EV demand following the expiration of some tax incentives. At the same time, Tesla chief executive Elon Musk has increasingly emphasized the company’s ambitions in autonomous driving and robotaxi services, as well as humanoid robotics, which investors see as key to Tesla’s long-term valuation.
Autopilot enables Tesla vehicles to accelerate, brake and maintain lanes on highways, while the Full Self-Driving package adds features such as lane changes and the ability to respond to traffic signals on city streets.
