California DMV court rules Tesla misled buyers on Autopilot and Full Self-Driving

A California administrative court ruled against Tesla, concluding that the company’s marketing for Autopilot and Full Self-Driving misled consumers by implying its cars could handle fully autonomous, Level 5 driving. The state’s Department of Motor Vehicles had accused the automaker in 2022 of using deceptive advertising. In response, Tesla added the word “Supervised” to the Full Self-Driving name, a rewording that ultimately did not sway the court.

The judge sided with the DMV but gave Tesla 90 days to fix its marketing materials. If the company fails to comply, sales and production in California will be suspended for 30 days. The grace period leaves the company room to adjust, yet the potential penalty carries real weight.

DMV Director Steve Gordon said the agency was asking Tesla to do what it has done in other markets and to label these vehicles appropriately.

Analysts note that a halt in California could hit Tesla hard. The state accounts for nearly a third of the company’s U.S. sales, and the Fremont plant builds the Model S, X, 3, and Y. Any production slowdown could affect deliveries and the company’s financial performance, so even a short pause would reverberate across operations.