A California Judge Rules That Tesla Has Misled Consumers

Tesla may have to rebrand Autopilot.

Steve Gordon, the Director of the California Department of Motor Vehicles, said in a media briefing on Tuesday that Tesla has 90 days to amend its advertising language or face a 30-day suspension from selling in California.

Gordon said on Tuesday that the DMV is specifically asking Tesla to change the name “Autopilot” to clarify that the company has advanced driving systems, which do not equate to an automated system or an autonomous vehicle. Changes must be made within 90 days, or the DMV will “enforce the cessation of sales.”

“My guess is that they will pursue some remedy,” said Gordon of what Tesla might do next, “but the easiest one for them is just to come into compliance.”

In response to the DMV’s decision, a Tesla spokesperson told Business Insider that this is “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,” the spokesperson added.

On November 21, Administrative Judge Juliet E. Cox made a proposed decision about whether Tesla has misled consumers into thinking its cars are more capable of driving themselves than they actually are, and transmitted it to the DMV for consideration. The document containing the proposal, however, has been withheld from the public and won’t be released till December 22.

Gordon said during the Tuesday briefing that Cox recommended both a suspension of Tesla’s license to sell and to manufacture in California. The DMV, however, decided not to pursue a suspension of the license to manufacture and put a temporary 90-day stay on the suspension of the license to sell for Tesla to make amends.

“They’re very important to the state,” said Gordon of Tesla. “We want to be fair to them and give them a chance to see if they can find a resolution now that there is a ruling from the administrative law judge.”

“If you look at the Q3 report of this year, Tesla has the top-selling car, the Model Y, in its segment,” Gordon added. “We felt that the leverage via the sales channel was sufficient to get compliance.”

The notice to Tesla follows a weeklong hearing in July at the administrative court in Oakland. In 2022, the DMV sued Tesla, accusing the carmaker of misleading consumers through Tesla’s advertisements and by naming its driver assistance technologies “Full Self-Driving” and “Autopilot.”

Tesla, which had a rocky year, denied that the company had ever tried to conceal the fact that its vehicles cannot fully drive themselves.

The DMV sought to suspend Tesla’s ability to sell cars in the state for at least 30 days and award consumers monetary damages.

The CA DMV wrote in its complaint that on multiple occasions in 2021 and 2022, Tesla’s website advertised its FSD driver assistance system as being “designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.”

Tesla’s lawyers said during the hearing that the company has always informed buyers that they “cannot fully rely” on FSD or Autopilot.

“Cars with Full Self-Driving capabilities are currently not capable of driving themselves,” said Attorney Matthew Benedetto, a member of Tesla’s legal team, during the hearing.