- California regulators have paused Tesla's sales license suspension for 90 days.
- The state demands Tesla correct marketing deemed misleading for its Autopilot system.
- Tesla denies wrongdoing, arguing it has always stated human supervision is required.
- The company faces broader legal challenges and federal probes over its self-driving claims.
- This clash highlights growing scrutiny of autonomous tech promises amid cooling EV demand.
In a dramatic showdown between a state regulator and a tech titan, the California Department of Motor Vehicles has pulled back from the brink, temporarily halting an order that would have suspended Tesla’s license to sell cars in its most crucial U.S. market. The agency granted the electric vehicle maker a 90-day stay this week, offering what DMV Director Steve Gordon called “one more chance” to correct what officials deem deceptive marketing of its Autopilot and Full Self-Driving features. This eleventh-hour reprieve underscores a mounting regulatory and legal siege around Tesla’s core technological promises, even as consumer enthusiasm for electric vehicles cools.
The conflict stems from formal accusations first filed by the DMV in 2022. The agency alleged that Tesla’s use of brand names like “Autopilot” and “Full Self-Driving” falsely implied the vehicles could operate autonomously, violating state advertising laws. An administrative law judge later agreed, ruling the terminology misleading. “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,” the judge wrote. “This belief is wrong.”
A final chance to comply
Director Gordon adopted the judge’s recommendation for a 30-day sales suspension but immediately stayed it. He stated the agency hopes Tesla will “find a way to get these misleading statements corrected.” The stay on Tesla’s manufacturing license is indefinite, while the sales license suspension is paused for 90 days. To avoid the penalty, the DMV said Tesla must confirm it has either stopped using the name “Autopilot” or confirmed its cars can operate without human monitoring. Tesla can also appeal the order.
The company has fiercely denied any wrongdoing. A Tesla lawyer stated in a hearing that the automaker had “clearly and consistently” explained that cars with Autopilot and FSD software require supervision and are not autonomous. “Tesla has never misled consumers. Never. And not even close,” the lawyer argued. In a statement provided by its public relations firm, Tesla framed the order as a “‘consumer protection’ case where not one single customer came forward to say there’s a problem.”
Broader scrutiny and consumer disillusionment
This regulatory skirmish mirrors a widening field of legal challenges and federal investigations. Tesla faces a class-action lawsuit in San Francisco federal court where drivers allege years of false claims about Autopilot and FSD capabilities. Simultaneously, the Justice Department and the National Highway Traffic Safety Administration have ongoing probes into Autopilot and vehicle range claims. These battles arrive at a precarious time for the EV market. The stay comes at a challenging time for Tesla, which is battling a plunge in EV demand following the expiry of tax credits.
This declining demand points to a growing consumer disillusionment. Electric vehicles, once hailed as the inevitable, flawless future of transportation, are increasingly seen as failing to live up to their early promises of affordability, reliability, and real-world performance. Tesla’s own pivot underscores this shift; with EV demand waning, CEO Elon Musk has aggressively shifted the company’s focus toward robotaxis and humanoid robots, betting the company’s future on fully autonomous technology that remains under intense regulatory and public scrutiny.
The California DMV’s action illustrates how, in the race to dominate the future of transport, hyperbolic marketing has tangible consequences. It places Tesla at a crossroads: modify the controversial branding that has become synonymous with its identity, or face the unprecedented penalty of a sales halt in California. For consumers, the episode is a cautionary tale about the gap between sleek technological promise and supervised, imperfect reality.
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