Tesla is once again under regulatory scrutiny as the California Department of Motor Vehicles (DMV) seeks to suspend the automaker’s license to sell and manufacture vehicles in the state for at least 30 days. The move stems from allegations that Tesla has misled consumers through its marketing of the company’s Autopilot and Full Self-Driving (FSD) features. A five-day administrative hearing began this week in Oakland, where attorneys for both the DMV and Tesla are presenting arguments on the matter.
The California DMV first launched an investigation into Tesla’s advertising practices in 2021, formally raising concerns in 2022. According to court filings, the DMV contends that Tesla’s use of terms such as “Autopilot” and “Full Self-Driving” conveys to consumers that its vehicles are capable of operating autonomously, which they are not. The DMV has cited specific statements from Tesla’s website that suggest the vehicles can perform complex driving tasks without driver intervention, including navigating urban streets and automatically parking themselves.
Attorneys representing the state argue these claims amount to false advertising and have led to widespread consumer misunderstanding. Deputy Attorney General Christopher Beatty, representing the DMV, stated during opening remarks that Tesla’s marketing has for years suggested capabilities the vehicles do not possess. He characterized the case as a straightforward issue of consumer protection and truth in advertising. Tesla’s legal team has countered that the company has always made clear its driver-assistance systems require active human supervision.
California DMV says Tesla misled consumers with driver-assist ads
Attorney David Marcus argued that Tesla’s use of aspirational language is consistent with industry practices and that no reasonable consumer would believe the cars are fully autonomous today. Marcus further suggested that the DMV’s action is an attempt to stifle technological progress in self-driving innovation. Testimony during the hearing has focused on how Tesla’s language might be interpreted by average consumers. DMV Commander Melanie Rosario testified that terms like “Autopilot” could reasonably lead a driver to believe a car is capable of driving itself.
She also noted the apparent contradiction between Tesla’s marketing claims and the company’s disclaimers urging drivers to keep their hands on the wheel. If successful, the DMV’s request for a 30-day suspension could have a significant impact on Tesla’s business in California, the largest market for electric vehicles in the United States. A temporary sales ban would come at a challenging time for Tesla, as the company has already experienced a 12.6% decline in U.S. sales during the second quarter of 2025. California represents a critical portion of Tesla’s domestic revenue and unit sales.
Meanwhile, Tesla is also facing separate legal challenges over its driver-assistance technology in a federal trial in Miami concerning a fatal 2019 crash involving a Tesla Model S with Autopilot engaged. The outcome of both cases could influence future regulatory standards and public perceptions of semi-autonomous driving technologies across the automotive industry. The hearing in Oakland is expected to conclude by the end of the week, with a decision on the license suspension likely to follow shortly thereafter. – By Content Syndication Services.