California judge backs up to 30-day Tesla cars sales suspension over Autopilot marketing

Tesla is facing renewed regulatory scrutiny in California after an administrative law judge ruled that the company engaged in deceptive marketing practices related to its Autopilot and Full Self-Driving (FSD) driver-assistance systems. The judge found that Tesla’s descriptions of the technologies could mislead consumers about their capabilities and recommended suspending the company’s license to sell or manufacture vehicles in the state for up to 30 days.

The ruling stems from a false advertising complaint filed by the California Department of Motor Vehicles in 2022, which argued that Tesla overstated the autonomy of its driver-assistance features. While the judge endorsed the DMV’s claims, enforcement will not be immediate. DMV director Steve Gordon said Tesla will be given a 90-day window to clarify or remove any misleading language from its marketing materials before any sales-related suspension is imposed.

Crucially, the DMV will stay any action against Tesla’s manufacturing license, ensuring there is no disruption to factory operations in California. That distinction limits the immediate operational impact and suggests regulators are focused on consumer protection rather than curtailing production capacity.

The ruling adds to a growing list of regulatory challenges confronting Tesla as it seeks to position itself at the forefront of autonomous driving. Authorities in multiple jurisdictions have raised concerns about how driver-assistance systems are described and understood by consumers, particularly as Tesla pushes toward wider deployment of advanced autonomy features.

It’ll be interesting to see if the legal setback dampens investor enthusiasm. Tesla shares closed at a record high on Tuesday, buoyed by optimism surrounding the company’s robotaxi ambitions and expectations that autonomous mobility could unlock a significant new revenue stream. The market reaction highlights a disconnect between near-term regulatory risk and longer-term investor confidence in Tesla’s technology roadmap.

Looking ahead, the outcome will hinge on whether Tesla adjusts its marketing language to satisfy regulators without undermining the strategic narrative around autonomy. While the potential license suspension remains a headline risk, the episode underscores how regulatory scrutiny is intensifying just as Tesla accelerates its push into driverless transportation.