California Allows Tesla To Continue Sales In State… For Now

Authored by Kimberly Hayek via The Epoch Times (emphasis ours),

California’s Department of Motor Vehicles (DMV) has placed on hold an order suspending Tesla’s car sales in the state, granting the electric vehicle maker additional time to respond to allegations of misleading marketing and overstated self-driving capabilities.

DMV Director Steve Gordon told reporters on Tuesday that the agency adopted a judge’s recommendation for a 30-day suspension of Tesla’s manufacturing and sales licenses, but stayed the measures.

The stay lasts for 90 days on sales and indefinitely on manufacturing, which Gordon said provides Tesla “one more chance to be able to remedy the situation.” Gordon noted that he hopes Tesla will “find a way to get these misleading statements corrected.”

Tesla can appeal the order within the agency or in court, Gordon said.

The DMV first filed complaints in 2022, alleging that Tesla had made untrue or misleading statements about its Autopilot and Full Self-Driving (FSD) features. According to regulatory filings, the agency claimed that the branding implied the vehicles could operate autonomously, in violation of state advertising regulations. A DMV spokesperson at the time indicated that successful action could require Tesla to better educate consumers about feature limitations and provide cautionary warnings.

In a 2024 ruling, a judge threw out Tesla’s motion to dismiss the lawsuit, accepting the state’s argument that even with disclaimers, misleading terms could attract customers unlawfully. The DMV argued Tesla’s language led reasonable people to believe vehicles functioned autonomously, despite requiring active supervision.

A lawyer at Tesla stated in a hearing that the company had “clearly and consistently” explained that cars equipped with Autopilot and FSD software require driver supervision and are not autonomous.

“Tesla has never misled consumers. Never. And not even close,” the lawyer said.

Tesla is currently facing reduced demand for their electric vehicles after the end of key tax credits. CEO Elon Musk has shifted the company’s focus to robotaxis that use an unsupervised FSD version and humanoid robots.

Autopilot assists with highway tasks like acceleration, braking, and lane-keeping, while FSD enables lane changes, traffic signal obedience, and city driving—all under supervision. Tesla employs “supervised” FSD in consumer vehicles while “unsupervised” variants are used in factory operations and a monitored robotaxi service in Austin.

The DMV’s stance echoes broader scrutiny. In 2022, drivers filed a class-action lawsuit in San Francisco federal court alleging false claims about Autopilot and FSD, seeking damages for purchasers since 2016. That suit followed the DMV’s initial complaints.

The company was victorious in 2023 in a trial over a fatal crash involving Autopilot, with jurors finding that the company had provided sufficient driver warnings. In a separate 2024 ruling, fraud claims against Musk and officials were dismissed, finding that statements such as Autopilot being safer than average drivers were not fraudulent.

Additionally, a 2023 recall of 362,000 vehicles addressed FSD software bugs risking crashes at intersections, underscoring ongoing safety concerns. Federal probes by the Justice Department and National Highway Traffic Safety Administration continue into Autopilot and range claims.

The automaker did not immediately respond to requests for comment on the latest developments.

Reuters contributed to this report