California May Suspend Tesla’s Sales License for 30 Days Over Self-Driving Claims

Tesla Faces Suspension Threat Over Self-Driving Claims

California regulators have issued a warning to Tesla, indicating that the company may face suspension of its California sales license early next year if it does not adjust its marketing practices regarding self-driving features. This action follows a judge’s determination that Tesla, under the leadership of Elon Musk, has been misleading consumers about the capabilities of its autonomous driving technology.

The proposed sanctions, detailed in a decision released late Tuesday by Administrative Law Judge Juliet Cox, would impose a potential 30-day blackout on Tesla’s sales in California. Cox found that Tesla has consistently employed deceptive marketing strategies, particularly through the use of terms such as “Autopilot” and “Full Self-Driving” in promoting its technology.

Following five days of hearings in July in Oakland, Cox also suggested suspending Tesla’s license to manufacture vehicles at its Fremont plant; however, California regulators have chosen not to pursue that aspect of the judge’s recommendations.

Tesla now has a 90-day period to amend its marketing practices to more accurately reflect the limitations of its self-driving technology. Earlier this year, in response to regulators’ concerns, the automaker updated its messaging to emphasize that its Full Self-Driving software requires human supervision.

“Tesla can take simple steps to pause this decision and permanently resolve this issue — steps autonomous vehicle companies and other automakers have been able to achieve," noted Steve Gordon, director of the California Department of Motor Vehicles.

In response to the judgment, Tesla dismissed the findings as excessive regulatory action. In a post on Musk’s X platform, the company stated, “This was 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 company has experienced a significant downturn in global demand, which has been exacerbated by increased competition and an aging vehicle lineup. Despite this, efforts to revitalize its offerings have included updates to the Model Y, which remains the world’s best-selling vehicle, and the introduction of lower-priced versions of both the Model Y and Model X.

Since Musk’s controversial tenure in Washington, following a fallout with the Trump administration, Tesla’s sales have continued to struggle, showing a 9% decrease from 2024 through the first nine months of this year. Nonetheless, Tesla’s stock recently reached an all-time high of $495.28 during early trading before retracting to below $470. The stock remains slightly above pre-political fallout levels, reflecting investor confidence in Musk’s vision for artificial intelligence and his plans for self-driving robotaxis.

While Musk has long promised advancements in self-driving technology—with limited success—Tesla initiated testing of its robotaxis in Austin earlier this year, albeit still with a human supervisor present. Recent announcements indicate that the company is now testing these vehicles without a safety monitor.

California regulators are not the first entities to express concerns regarding Tesla’s portrayal of its self-driving capabilities. The company has consistently maintained that its owner’s manuals and website content clarify that human oversight is required, even as it released a controversial 2020 video depicting a vehicle navigating autonomously, which was used as evidence against it.

Tesla has faced a range of lawsuits alleging that its misrepresentations regarding self-driving technology have led to fatal accidents. Although the company has settled or successfully defended itself in numerous cases, a Miami jury recently found it partially liable for a fatal crash involving Autopilot, resulting in a judgment of over $240 million in damages against the automaker.