A US administrative law judge in California has ruled that Tesla Inc (NASDAQ:TSLA) used misleading and deceptive language in marketing its “Autopilot” and “Full Self-Driving” (FSD) software, a decision that could lead to the temporary suspension of the company’s vehicle sales and production in the state.
The ruling marks a major turning point in a long-running case brought on by the California Department of Motor Vehicles (DMV), which argued that Tesla exaggerated the capabilities of its driver-assistance systems in a way that endangered public safety.
The judge concluded that Tesla’s marketing created a false and inflated impression of autonomy, fostering dangerous overconfidence among drivers.
In line with the DMV’s request, the judge recommended suspending Tesla’s vehicle sales in California for 30 days. However, the DMV chose not to immediately enforce the penalty, instead granting Tesla 60 days to revise or remove the misleading language from its marketing materials.
The judge also recommended a 30-day suspension of Tesla’s manufacturing license. This has also been put on hold for now, with expectations that both measures could be implemented depending on Tesla’s response.
DMV director Steve Gordon said the decision confirms California’s commitment to holding all automakers to the highest safety standards. “This ruling affirms that California will continue to protect drivers, passengers and pedestrians,” Gordon said, adding that Tesla could resolve the issue by taking clear and straightforward steps that other automakers have already implemented in the state.
Tesla downplayed the decision in a statement on the social media platform X, writing that its vehicle sales in California would continue uninterrupted. The automaker claimed the ruling was merely a “consumer protection” issue related to the use of the term “Autopilot” and insisted that no customer had been harmed.
Shares of Tesla added 0.2% at about $491 at Wednesday’s open, with the stock up almost 22% this year.