Tesla may be temporarily prohibited from selling vehicles in California as the state’s Department of Motor Vehicles (DMV) moves forward with a case alleging the company misled consumers about the capabilities of its Autopilot and Full Self-Driving (FSD) technologies, Bloomberg reported.
The DMV is seeking to suspend Tesla’s manufacturer and dealer license for at least 30 days, which would halt vehicle sales in California—Tesla’s largest U.S. market. The agency contends that Tesla’s marketing of its driver-assistance features violates state regulations against deceptive advertising, citing statements that may have overstated the systems’ autonomy.
At issue is Tesla’s use of terms like “Autopilot” and “Full Self-Driving,” which the DMV argues could suggest the vehicles are capable of autonomous operation. Although Tesla includes disclaimers requiring drivers to remain attentive and supervise the vehicle at all times, the DMV maintains that these caveats do not negate the misleading nature of the product names and associated advertising.
The case focuses on promotional statements made between 2021 and 2022, including language suggesting FSD could complete trips with “no action required in the driver’s seat.” The DMV asserts such claims are inconsistent with the vehicle’s actual capabilities and contravene state consumer protection laws. Tesla, in response, argues that its language is forward-looking, clearly notes the requirement for driver engagement, and is protected under constitutional free speech provisions.
The hearing process will also consider potential financial penalties, with the amount to be determined later. A suspension of Tesla’s license in California would represent a major setback for the automaker, potentially affecting revenue and casting uncertainty over the company’s autonomous vehicle strategy.
