A California administrative law judge has ruled that Tesla’s marketing for its “Autopilot” and “Full Self-Driving” systems was deceptive, according to the California Department of Motor Vehicles. The ruling recommended a 30-day suspension of the electric vehicle manufacturer’s licenses to sell and manufacture cars in the state.
While the California DMV initially brought formal accusations of false advertising against Tesla in 2022, the agency has now adopted a modified penalty. The DMV will grant Tesla a 60-day window to rectify any deceptive or confusing claims surrounding its driver-assistance technologies. If these marketing issues are not resolved within this period, the DMV will proceed with the 30-day suspension of Tesla’s license to sell vehicles in California. However, the judge’s order for a suspension of Tesla’s manufacturing license has been stayed, meaning the company’s factory operations in the state will not be interrupted.
The DMV’s 2022 accusations centered on the argument that Tesla’s marketing implied its Autopilot and Full Self-Driving systems enabled autonomous operation, when in reality, they required constant driver supervision and readiness to intervene. Tesla has since renamed its premium driver-assistance option to “Full Self-Driving (Supervised)” in an effort to address these concerns.
The judge’s proposed order stated, “A reasonable consumer likely would believe that a vehicle with Full Self-Driving Capability can travel safely without a human driver’s constant, undivided attention. This belief is wrong — both as a technological matter and as a legal matter — which makes the name Full Self-Driving Capability misleading,” thereby violating California’s civil and vehicle codes.
In response, a representative from Tesla, speaking through public relations firm FGS Global, stated via email, “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.” It’s important to note that the California DMV did not cite consumer complaints as the basis for its accusations. Nevertheless, Tesla is currently facing a class-action lawsuit in California’s Northern District from drivers alleging they were misled for years regarding the self-driving capabilities of their vehicles.
Despite this regulatory challenge, Tesla’s stock price closed at a record high on Tuesday. This surge appears to be largely driven by renewed investor optimism surrounding the company’s future plans for its Robotaxis and advancements in driverless technology. The market’s reaction highlights a broader trend where technological innovation and future potential can significantly influence stock valuations, even amidst ongoing scrutiny of current product marketing. The ongoing debate over the capabilities and marketing of advanced driver-assistance systems underscores the complex interplay between technological ambition, regulatory oversight, and consumer perception in the rapidly evolving automotive industry.
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