California Considers Stopping Tesla Sales for ‘Autopilot’ Misleading Advertising

California is considering a potential halt on Tesla vehicle sales due to allegations of misleading advertising concerning its “Autopilot” feature. This warning comes from the California Department of Motor Vehicles (DMV), which claims that the term implies capabilities that Tesla vehicles do not possess.

California DMV’s Position on Tesla’s “Autopilot”

The DMV’s contention is that Tesla’s marketing of the “Autopilot” name misleads consumers about the actual functionality of the vehicle. According to a DMV statement, the cars fall short of the implied promise of full autonomy. The regulator had the authority to immediately suspend Tesla’s sales for 30 days based on previous legal findings. However, it has opted to pause these actions for 90 days to provide time for ongoing discussions with the manufacturer.

Background on the Dispute

The dispute dates back to actions initiated by the DMV in 2023, which questioned the appropriateness of the “Autopilot” branding. As negotiations progressed without resolution, a potential court intervention may be necessary for Tesla to prevent a sales halt.

Statements from Officials

In a statement, California DMV Director Steve Gordon emphasized that Tesla has straightforward options to address these concerns and could take steps to resolve the issue permanently.

Tesla’s Response

Tesla has publicly criticized the DMV’s actions. In a post shared on X, they stated that the order for the term “Autopilot” was unnecessary as no customers had reported issues. They affirmed that sales in California would persist without interruption.

Changes and Features in Tesla Vehicles

Amidst the regulatory scrutiny, Tesla has rebranded its “Full Self-Driving” (FSD) option as “Full Self-Driving (Supervised)”. This feature, which costs approximately $8,000, still requires drivers to maintain awareness and be prepared to regain control.

• Autopilot Mode: Provides basic driver assistance, such as automatic braking and blind spot alerts.
• FSD Features: Designed to allow near-autonomous driving with supervision from the driver.

Legal and Market Context

The concerns about “Autopilot” have emerged alongside various federal investigations into Tesla’s self-driving technology. Notably, a jury in Florida recently ruled against Tesla, holding it liable for a fatal accident involving an Autopilot-equipped Model S, awarding $329 million in damages.

Impact on Tesla’s Market Performance

California remains a crucial market for Tesla, housing one of its primary production facilities. On the day before the DMV’s announcement, Tesla’s stock hit a record high, increasing by 3% that day and 21% over the year. While shares remained stable in premarket trading following the DMV’s statement, the situation highlights ongoing challenges for the electric vehicle manufacturer.