Tesla Faces License Suspension in California Over Autopilot Claims

Tesla could lose its sales license in California for misleading ads about Autopilot and FSD systems. Hearings begin Sept. 9 and may impact industry rules.

California regulators are turning up the heat on Tesla. The state’s Department of Motor Vehicles (DMV) is seeking a 30-day suspension of Tesla’s license to manufacture and sell cars in the state. The reason: accusations that the company misled consumers about the capabilities of its Autopilot and Full Self-Driving (FSD) systems.

At the heart of the complaint are marketing phrases like “no action required by the person in the driver’s seat” and “all you need to do is get in and tell your car where to go.” According to the DMV, such statements wrongly suggest full vehicle autonomy, while in reality, Tesla’s technology still requires constant human supervision.

Tesla has pushed back, insisting it clearly states that drivers must keep their hands on the wheel and remain attentive at all times. The company also invoked the First Amendment, arguing it has the right to describe its systems in that way. But the court rejected Tesla’s attempt to dismiss the case, stating that freedom of speech does not protect potentially misleading commercial speech.

The administrative hearing is set to begin on September 9 in Oakland. If the DMV prevails, Tesla may be forced to revise its marketing or temporarily halt sales in its most critical U.S. market. California alone accounts for nearly 10% of Tesla’s global deliveries.

This legal battle is just one thread in a wider regulatory net. Tesla is also facing class-action lawsuits, probes from the SEC and Department of Justice, and ongoing investigations by the NHTSA related to crashes involving its driver-assistance systems. According to government data, Tesla vehicles have been involved in hundreds of incidents since 2021, including 13 fatalities.

The outcome of the California case may ultimately shape how autonomous driving technology is advertised across the United States. For now, all eyes are on the courtroom—and on what could be a landmark moment for the auto industry.