California DMV Warns Tesla Could Face 30-Day Sales Suspension Over Misleading Autopilot Marketing — 90-Day Compliance Window Given
SACRAMENTO, CALIFORNIA — California regulators have escalated their scrutiny of Tesla’s Autopilot and Full Self-Driving marketing, warning the electric vehicle maker could face a 30-day suspension of vehicle sales in its largest U.S. market unless it alters how it promotes its advanced driver-assistance software. The decision — centered on consumer protection concerning Tesla Autopilot advertising claims — gives the company a 90-day compliance period to make changes before the suspension takes effect.
The California Department of Motor Vehicles (DMV) adopted a ruling finding that Tesla’s use of terms like “Autopilot” and “Full Self-Driving” (FSD) in marketing has misled consumers into thinking these systems provide full autonomy when in fact they require human supervision at all times.
Regulatory Action Over Autopilot Misleading Claims
The conflict stems from a long-running case that began in 2022 when the DMV accused Tesla of violating state consumer protection laws by overstating the autonomy of its driver-assist features. An administrative law judge previously recommended suspending both Tesla’s sales and manufacturing licenses for 30 days, but the DMV stayed the manufacturing suspension indefinitely and focused enforcement on the sales license.
Under the DMV’s revised order, Tesla now has 90 days to either stop using “Autopilot” terminology that suggests self-driving capability or demonstrate that its systems can perform without active driver monitoring. If Tesla fails to comply within the allotted window, California could temporarily halt Tesla vehicle sales statewide.
Tesla’s Response and Ongoing Debate on Autopilot Safety
Tesla has publicly rejected the notion that its advertising misleads customers, stating that the action is strictly a “consumer protection order about the use of the term ‘Autopilot’ in a case where not a single customer complaint has been filed.” The company asserts that it consistently informs buyers that its Autopilot and FSD features require driver attention and are not fully autonomous.
Despite Tesla’s defense, critics emphasize that the difference between advanced driver-assistance systems (ADAS) and true self-driving technology must be clearly communicated. The regulatory challenge underscores growing nationwide concerns about how electric vehicle manufacturers market semi-automated driving technology to average consumers.
Market Impact and Broader Implications for EV Industry
California is Tesla’s largest U.S. market — home to significant manufacturing operations and a substantial portion of overall U.S. EV sales — making the potential sales suspension far more than a symbolic action. Analysts warn that even a short-term halt in Tesla EV sales in California could shave millions off the company’s revenue and hurt demand at a time when broader electric vehicle sales are already under pressure.
Goldman Sachs recently reiterated a Neutral rating on Tesla stock, citing regulatory risks around Autopilot marketing and potential impacts on investor sentiment. The firm noted that Tesla’s adherence to compliance requirements over the next few months could play a major role in how its stock performs through 2026.
What Happens Next
Tesla has been given deadlines to either revise branding and descriptions of its driving assistance technology — or prepare for state action that could temporarily restrict sales. The DMV’s 90-day window is designed to encourage compliance without immediately disrupting consumer purchases, but authorities have made clear that enforcement will proceed if Tesla does not take corrective steps.
As California continues to lead U.S. vehicle advertising regulation and advanced driver-assistance oversight, the outcome of this case could influence how EV makers market semi-autonomous systems nationwide — particularly as many automakers race to develop fully autonomous vehicles.
