Tesla’s future in California, its home turf and one of its biggest markets, may be hanging in the balance. The California Department of Motor Vehicles (DMV) has moved to block the electric vehicle maker from selling its cars in the state for at least 30 days, accusing the company of misleading customers about the capabilities of its Autopilot and Full Self-Driving (FSD) systems.
DMV Slams Tesla’s Naming and Promotion of Autonomy Features
In a court hearing in Oakland earlier this week, DMV attorney Melanie Rosario claimed that Tesla’s branding and promotional materials falsely suggest that its vehicles are capable of operating without driver input. Rosario pointed to the use of terms like “Autopilot” and “Full Self-Driving” as “inherently misleading” and “contradictory,” given that the features still require constant driver supervision.
“These names imply full vehicle autonomy,” Rosario told the court. “That’s not the case, and consumers have been misled into overestimating what these systems can actually do.”
California’s Auto Safety Law, passed in 2023, explicitly prohibits carmakers from deceptively marketing semi-autonomous features. Under this law, even branding that hints at full autonomy could put automakers in violation.
Tesla Fights Back, Says Consumers Are Not Misled
Tesla has denied any wrongdoing. In its legal defense, the company argued that it has been clear in all documentation and on its website that both Autopilot and Full Self-Driving features require driver attention at all times.
“A reasonable consumer understands they must supervise the vehicle,” Tesla’s legal team said in its opening argument. “There’s no evidence that Tesla is attempting to misrepresent the capabilities of its products.”
Despite this, the DMV insists it has received multiple complaints from Tesla owners, many of whom believed their cars were more autonomous than they actually are.
Fatal Florida Crash Highlights Growing Scrutiny
Tesla’s legal troubles aren’t limited to California. In a separate Florida court case this week, a driver testified about a 2019 fatal crash involving a Tesla using Autopilot. The driver claimed the car failed to detect a hazard on the road, leading to a deadly collision. The incident is one of dozens being reviewed by the National Highway Traffic Safety Administration (NHTSA), which has documented multiple crashes involving Tesla’s driver-assist systems.
Musk’s Robotaxi Dream Faces Regulatory Reality
The controversy comes just days after Tesla CEO Elon Musk doubled down on his vision for a fully autonomous future. During Tesla’s quarterly earnings call, Musk teased an upcoming large-scale rollout of Tesla’s driverless “Robotaxi” service. He boldly claimed the company could reach “half of the U.S. population by the end of 2025” but only “subject to regulatory approvals.”
That caveat looms large.
“There’s no public evidence that Tesla has filed formal applications to any state authorities for a Robotaxi rollout,” said Paul Miller, senior analyst at Forrester. “It’s a nice idea, but regulators aren’t known for moving quickly, especially when lives are at stake.”
What Comes Next?
If the California court sides with the DMV, Tesla could face a temporary ban on sales in the country’s largest auto market, a rare and serious blow to a company known for pushing regulatory boundaries.
More broadly, the outcome could set a precedent for how regulators across the U.S. and potentially globally handle autonomous driving claims. For Tesla, it’s yet another reminder that ambition and reality don’t always drive in the same lane.
