Administrative law judge has ruled that Tesla engaged in misleading marketing that gave customers a false impression of the capabilities of its Autopilot and Full Self-Driving driver assistance software, a key development in a years-long case launched by the California Department of Motor Vehicles.
The judge agreed state DMV request to suspend Tesla sales for 30 days as a penalty for its actions, but the DMV stayed the order and is giving Tesla 60 days to amend or remove any misleading language before implementing the suspension; according to to multiple shops. The judge also recommended that Tesla’s manufacturing license be suspended for 30 days, but the DMV stayed that order as well, according to Bloomberg News.
“Today’s decision by the DMV reaffirms that the department will hold every vehicle manufacturer to the highest safety standards to protect California drivers, passengers and pedestrians,” said DMV Director Steve Gordon. “Tesla can take simple steps to stop this decision and resolve this issue once and for all — steps that autonomous vehicle companies and other automakers have been able to achieve in California’s leading and supportive innovation market.”
said Tesla in a position at X that: “California sales will continue without interruption.”
“This was a ‘consumer protection’ order regarding the use of the term ‘Autopilot’ in a situation where not a single customer came forward to say there was a problem,” the company wrote.
After the 60-day window, Tesla can appeal the decision, and if Tesla complies, the suspensions will be lifted. However, it’s not immediately clear what action the DMV wants Tesla to take, beyond telling the company to “take action regarding the use of the term ‘autopilot.’
Tesla has faced multiple investigations from Attorney General of Californiathe Ministry of Justiceand the Securities and Exchange Commission for similar allegations that its marketing about partial autonomy systems was misleading. The company has also faced (and now settled) a number of personal civil lawsuits over accidents involving its Autopilot technology.
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The case brought by the CA DMV has been going through the state’s Office of Administrative Hearings for years. The agency essentially accused Tesla of leading customers to believe its advanced driver assistance systems were capable of high levels of autonomy. This has led to over-reliance on the systems, the DMV claims, which has contributed to dozens of accidents and multiple deaths. Tesla disputed those claims, saying its marketing was protected speech.
A sales shutdown in California, even temporarily, could have a significant impact on Tesla’s business as it remains the company’s largest market in the United States. A manufacturing suspension could also hurt Tesla’s business. While the company has built a massive factory in Austin, Texas (and moved its official headquarters to the same location), it still relies on its Fremont, California plant to build hundreds of thousands of vehicles, including all North American-bound Model 3 sedans.
The judge’s ruling comes as Tesla moves forward with its Robotaxi service trial in Austin. Over the weekend, the company removed the security screens from its small fleet in the city. It has been offering rides to customers in the city for the past six months, but with a safety screen in either the driver’s or passenger’s seat. Those vehicles run a different version of Tesla’s driving software than the automaker’s customers have in their cars, CEO Elon Musk said.
This story has been updated to include information from the DMV press release and Tesla’s response.
