Tesla misled customers about self-driving features, judge rules

Tesla could be temporarily locked out of its biggest US market if it doesn’t change deceptive marketing that exaggerates the self-driving capabilities of its cars, the California Department of Motor Vehicles warned on Tuesday, adopting the ruling of an administrative law judge.

The DMV said Tesla’s use of terms like “Autopilot” and “Full Self-Driving” to describe its advanced driver assist systems “is misleading and violates state law.” The agency ordered a 30-day suspension of Tesla’s license to sell cars in the state if Tesla does not fix marketing concerns surrounding the term “Autopilot” within a 60-day window.

However, the DMV decided not to impose a suspension on Tesla’s manufacturing license that had been recommended by the judge, avoiding a costly shutdown during a difficult time for the electric vehicle industry as it faces falling demand following the death of EV tax credits.

Compliance could require a rebrand of Tesla’s driver assistance software; the company currently uses the Autopilot and Full Self-Driving names for the products, which, unlike technology from robotaxi firms like Waymo, are not fully autonomous and require full driver attention at all times.

The decision comes after the DMV asked an administrative judge to consider Tesla’s marketing practices and weigh if a suspension of its licenses was justified. The agency said Tesla has made false and misleading statements about its self-driving systems for years, implying that they can operate autonomously when at no point have they been able to. Tesla has rejected the suggestion it misleads customers and insists it has always made it clear drivers can’t fully rely on the cars to drive themselves.