An administrative law judge has ruled that Tesla engaged in deceptive marketing about the capabilities of its Autopilot and Full Self-Driving software, leading to a pivotal order that could suspend the company’s sales and manufacturing licenses in California, as reported by TechCrunch. This is a massive development in a years-long case that was brought by the state’s Department of Motor Vehicles.
The judge sided with the CA DMV’s request to penalize Tesla by suspending both its sales and manufacturing licenses in California for 30 days. However, the DMV stayed the order and is giving the automaker a 60-day window to comply. If Tesla wants to avoid that suspension, it has two clear options. It must either drop the “Autopilot” name entirely or ship a significant software update to its vehicles that actually makes them fully autonomous.
Tesla, however, has already signaled that it won’t be complying with the order. In a post on X, the company stated directly: “Sales in California will continue uninterrupted.” The company argued that this was a “consumer protection” order focused only on the term “Autopilot” in a case where “not one single customer came forward to say there’s a problem.”
This is a serious development, considering California is Tesla’s largest market in the United States
Despite Tesla’s claims that no customers were harmed, the judge was clear that the DMV’s authority doesn’t actually depend on evidence that someone was specifically deceived or injured. The state agency is allowed to “act affirmatively to prevent deceptive advertising.”
The judge also addressed the company’s likely defiance in her decision. She noted that without the serious financial incentive of a suspension, Tesla offers “no reason for the DMV to expect that respondent will alter the Autopilot name, or will act to avoid continuing its misrepresentations to the public regarding its vehicles’ ADAS functions.” She concluded that the “Suspension of respondent’s licenses is a reasonable remedy.”
The DMV initiated this case years ago in the state’s Office of Administrative Hearings because it believed Tesla’s marketing made customers think the advanced driver assistance systems were capable of high levels of autonomy. This overconfidence in the systems, the DMV alleged, has contributed to dozens of crashes and multiple deaths. Tesla had attempted to refute these claims by arguing its marketing was protected speech.
It’s definitely worth noting that this isn’t the first time Tesla has been under fire for its marketing language, besides the public backlash following Elon Musk’s political involvement. The company has faced similar investigations from the California Attorney General, the Department of Justice, and the Securities and Exchange Commission. It has also settled a number of personal civil lawsuits regarding crashes involving its Autopilot technology.
A temporary shutdown of sales in California would be a huge blow to the company’s bottom line. A manufacturing suspension would also be incredibly disruptive. Interestingly, this decision hits right as Tesla is moving forward with its Robotaxi service test in Austin. Just over the weekend, the company removed the safety monitors from its small fleet running in the city.
Published: Dec 17, 2025 05:30 pm