California Judge Finds Tesla's Autopilot Marketing Misleading, DMV Sets Compliance Deadline

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(RTTNews) - A California administrative law judge has ruled that Tesla (TSLA) engaged in deceptive marketing related to its Autopilot and Full Self-Driving systems, according to the California Department of Motor Vehicles.

The judge concluded that Tesla's advertising could mislead consumers into believing its vehicles are capable of fully autonomous driving, and recommended a 30-day suspension of the company's licenses to sell and manufacture vehicles in the state.

The California DMV, which brought formal false-advertising charges against Tesla in 2022, said it has adopted the judge's findings but modified the penalty. The agency will allow Tesla a 60-day window to correct any misleading or unclear claims about Autopilot and Full Self-Driving. If the issues are not addressed within that period, the DMV said it will proceed with a 30-day suspension of Tesla's license to sell vehicles in California. The agency said it will not suspend Tesla's manufacturing license, ensuring no disruption to factory operations in the state.

The ruling centers on marketing that suggested Tesla vehicles could operate autonomously, despite requiring drivers to remain attentive and ready to intervene at all times. The judge said a reasonable consumer could interpret the term "Full Self-Driving" to mean hands-free, fully autonomous operation, which the judge described as inaccurate both technologically and legally, and therefore a violation of California civil and vehicle codes. Tesla has since renamed the feature "Full Self-Driving (Supervised)."

Tesla said through a spokesperson that the order is focused on consumer protection and the use of terminology, and noted that no individual customer complaints were cited in the case. The DMV also did not reference consumer complaints in its accusations. Separately, Tesla continues to face a class action lawsuit in federal court in California alleging that drivers were misled for years about the self-driving capabilities of its vehicles.

The ruling comes as Tesla shares closed at a record level on Tuesday, driven by investor enthusiasm around the company's plans for robotaxis and future driverless technology.

On Thursday, Tesla closed at $483.37, up 3.45%, and is currently trading after hours at $482.75, down 0.13%, on the NasdaqGS.