California may halt Tesla sales due to ‘false advertising’ in use of term ‘Autopilot’
By Chris Isidore, CNN
(CNN) — California is threatening to ban sales of Tesla cars in the state for 30 days after a regulator said the term “Autopilot” for its driver assist feature constitutes false advertising.
The California Department of Motor Vehicles could have halted Tesla sales in the state immediately, under terms of a previous administrative law judge’s findings. However, it said Tuesday it was pausing that action for 90 days in order to continue negotiations with the electric vehicle maker.
It said in a statement that Tesla cars do not live up to the promise suggested by the term “Autopilot” because they are not capable of operating as truly autonomous vehicles.
The DMV first brought action against Tesla in 2023 on the use of the term “Autopilot” and the two parties have been unable to reach an agreement. Now, if Tesla wants to avoid the halt of sales, it will likely need a court to block the DMV’s action.
“Tesla can take simple steps to pause this decision and permanently resolve this issue,” California DMV Director Steve Gordon said in a statement.
Tesla and its CEO Elon Musk have frequently made ambitious claims about the capability of its cars, and those claims have helped to drive its sales and the value of its stock. But the automaker has also issued a caution that drivers of its cars must stay alert and ready to take control of the vehicle in case of problems, even when using its driver assistance features.
Tesla on Tuesday criticized the action by the DMV, writing in a post on X: “This was a ‘consumer protection’ order about the use of the term ‘Autopilot’ in a case where not one single customer came forward to say there’s a problem. Sales in California will continue uninterrupted.”
As the DMV’s case against it advanced, Tesla changed the formal name of its more extensive “Full Self-Driving” features that are available for purchase at additional cost on Tesla cars. It now calls the $8,000 feature “Full Self-Driving (Supervised)” — though Musk and the car’s fans often simply refer to it as “FSD.”
The “Autopilot” mode provides driver assistance features found on many modern cars, such as automatic braking, reducing speed when a slower moving vehicle is in front of the car, and blind spot alerts. FSD, even the supervised version, is supposed to be able to essentially drive the car, even if the driver is supposed to be on alert and ready to take over.
California’s DMV is not the one questioning the safety of Tesla’s self-driving futures. Federal safety regulators have announced numerous investigations into accidents caused by drivers using the features. In August, a Florida jury found Tesla liable in the 2019 fatal crash of an Autopilot-equipped Model S, and ordered it to pay $329 million to the family of a deceased woman and an injured survivor. Tesla is appealing that verdict.
California is a key market for Tesla sales, and home to one of its two US factories. The DMV’s action could have been worse, as it postponed the 30 day halt in sales from taking immediate effect and permanently dropped a recommendation by an administrative law judge hearing the state’s complaint that could have stopped Tesla from temporarily manufacturing vehicles in the state.
Shares of Tesla (TSLA) closed at a record high Tuesday ahead of the regulator’s decision, up 3% on the day and 21% for the year. Its shares were little changed in premarket trading Wednesday.
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