An administrative law judge has determined that Tesla misled customers about the capabilities of its Autopilot and Full Self-Driving technologies, marking a significant moment in a lengthy case initiated by California’s Department of Motor Vehicles (DMV).
The judge supported the DMV’s request to halt Tesla sales for 30 days as a penalty for these actions. However, the DMV has paused this ruling, giving Tesla 60 days to adjust or remove any misleading language before the suspension takes effect, according to several sources. The judge also suggested suspending Tesla’s manufacturing license for 30 days, which the DMV has similarly stayed, as reported by Bloomberg News.
“The DMV’s decision today confirms that the department will hold every vehicle manufacturer to the highest safety standards to protect California’s drivers, passengers, and pedestrians,” said DMV director Steve Gordon in a statement. “Tesla can take simple steps to pause this decision and permanently resolve this issue—steps that other autonomous vehicle companies and automakers have successfully achieved in California’s innovative marketplace.”
Tesla responded via a post on X, stating: “Sales in California will continue uninterrupted.”
“This was a ‘consumer protection’ order regarding the term ‘Autopilot’ in a case where no customers have reported a problem,” the company added.
After the 60-day period, Tesla can appeal the decision. If Tesla complies, the suspensions will be lifted. However, it’s unclear what specific actions the DMV expects Tesla to take other than addressing the use of the term “Autopilot.” The DMV has not responded yet to requests for clarification or for details on Tesla’s plan to disregard this ruling.
Tesla has been under scrutiny from the California Attorney General, the Department of Justice, and the Securities and Exchange Commission regarding similar claims of misleading marketing related to its partial autonomy systems. The company has also settled several personal civil lawsuits connected to crashes involving its Autopilot technology.
The case raised by the California DMV has been in the works within the state’s Office of Administrative Hearings for years. The DMV has accused Tesla of leading customers to believe that its advanced driver assistance systems could achieve high levels of autonomy, ultimately fostering overconfidence in these systems and contributing to numerous crashes and fatalities. Tesla has denied these claims, asserting that its marketing constitutes protected speech.
A sales suspension in California, even short-term, could significantly impact Tesla’s business, as it is the company’s largest market in the U.S. A manufacturing suspension could also affect Tesla, which relies on its Fremont, California factory for producing hundreds of thousands of vehicles, including all North American Model 3 sedans, despite having a large factory in Austin, Texas.
This judge’s ruling comes at a time when Tesla is testing its Robotaxi service in Austin. Recently, the company removed safety monitors from its small fleet in the city. For the past six months, the company had been providing rides with safety monitors present, either in the driver’s or passenger’s seat. The vehicles involved are using a different version of Tesla’s driving software compared to what customers have in their cars, as mentioned by CEO Elon Musk.
This story has been updated to include information from the DMV’s press release and Tesla’s response.
