The California Department of Motor Vehicles (DMV) has issued a stark ultimatum to electric vehicle giant Tesla, giving the company 90 days to overhaul the marketing of its driver-assistance technology or risk a significant 30-day suspension of vehicle sales within the state.
Judge's Ruling Prompts Regulatory Action
This decisive move stems from a ruling made on Tuesday, 17 December 2024, by an administrative judge. The judge found that Tesla's use of terms like "Autopilot" and "Full Self-Driving" in its advertising could potentially mislead consumers about the capabilities of its vehicles.
State regulators have long argued that these names falsely imply the cars are fully autonomous. In reality, Tesla's systems require the driver to remain alert, monitor the road, and be prepared to take control at any moment. The technology handles steering, braking, and navigation but is not a substitute for an attentive human driver.
The Compliance Clock is Ticking
The core of the DMV's order focuses on Tesla's continued use of the "Autopilot" label. The agency has directed the company to either make the technology genuinely autonomous or cease using the term altogether. Tesla must confirm its compliance to avoid penalties.
DMV Director Steve Gordon told reporters, as reported by SFGate, that the 90-day warning was intended to give Tesla "a chance" to remedy the situation. "You could argue, one more chance," he stated. While the judge suggested a broader manufacturing halt, the DMV has opted not to enforce a production suspension at this time.
Market Reaction and Broader Implications
The announcement caused Tesla shares to dip by approximately 2%, partially offsetting gains driven by a viral video showcasing the company's driverless Robotaxi operating in Austin, Texas. CEO Elon Musk confirmed these tests are now running without any occupants.
Despite the sales ban threat, Director Gordon noted that Californians could still purchase Teslas out of state if a pause were imposed. However, he expressed expectation that Tesla would comply, given its substantial investment and extensive presence in California, which includes over 70 dealerships. "It would certainly be, I think, more efficient for Tesla to be in compliance and just continue to sell," Gordon concluded.
This dispute culminates a years-long legal battle between Tesla and California regulators. Although Tesla maintains its advertising is not deceptive and has begun shifting some marketing materials away from the "Autopilot" label toward terms like "Full Self-Driving (Supervised)," officials say remnants of the problematic branding persist and must be addressed.
