California Considers Halting Tesla Sales Over ‘Autopilot’ Misleading Advertising
California is evaluating the possibility of suspending Tesla sales for a period of 30 days. This action follows a ruling that the term “Autopilot” associated with Tesla’s driver-assistance technology qualifies as misleading advertising.
Details of the Regulatory Action
The California Department of Motor Vehicles (DMV) initially had the authority to halt Tesla sales immediately, based on findings from an administrative law judge. However, the DMV decided to delay this decision for 90 days to continue discussions with the electric vehicle manufacturer.
Concerns Over ‘Autopilot’
The DMV asserts that Tesla vehicles do not fulfill the expectations implied by the “Autopilot” term, as they do not function as fully autonomous cars. This inquiry began in 2023, yet no consensus has been reached between the two parties.
To avoid a sales halt, Tesla may need to seek judicial intervention against the DMV’s planned actions. DMV Director Steve Gordon remarked, “Tesla can take simple steps to pause this decision and permanently resolve this issue.”
Tesla’s Response to the DMV’s Concerns
Tesla challenged the DMV’s findings, stating there have been no consumer complaints regarding the term “Autopilot.” The company communicated via a post on X that “Sales in California will continue uninterrupted.”
Changes to Tesla Features
Amid the DMV’s scrutiny, Tesla has rebranded its upgraded driver-assistance technology. The feature previously known as “Full Self-Driving” is now called “Full Self-Driving (Supervised)” and is priced at $8,000. Despite the official name change, CEO Elon Musk and enthusiasts still refer to it as “FSD.”
Understanding Tesla’s Driver Assistance Capabilities
- Autopilot: Provides assistance such as automatic braking and blind spot alerts.
- FSD (Supervised): Designed to drive the vehicle under supervision, expecting the driver to remain attentive.
Legal and Safety Investigations
The DMV’s concerns are echoed by federal safety regulators, who are investigating several accidents involving Tesla’s driver-assistance features. Notably, in August, a Florida jury held Tesla accountable for a fatal crash involving an Autopilot-equipped Model S. The verdict required Tesla to pay $329 million to the victims of the incident, which the company is currently appealing.
The Importance of California to Tesla
California is a vital market for Tesla, serving as the location of one of its two manufacturing plants in the United States. Though the DMV’s actions could have escalated into a more severe situation, the decision to postpone the sales halt offers Tesla a potential opportunity to negotiate a resolution.
Despite these regulatory challenges, Tesla’s stock reached a record high, reflecting a 3% increase on the day of the DMV’s announcement and a 21% rise for the year. The shares exhibited minimal changes during premarket trading shortly thereafter.
