California regulators are poised to suspend Tesla's vehicle sales license in the state for 30 days unless the company revises its marketing for self-driving features. An administrative law judge ruled that terms like 'Autopilot' and 'Full Self-Driving' mislead consumers about the technology's capabilities, which require constant human supervision. Tesla has 90 days to comply and avoid the penalty.
The California Department of Motor Vehicles (DMV) adopted a proposed decision by Administrative Law Judge Juliet Cox on December 16, 2025, following five days of hearings in Oakland in July. The judge determined that Tesla has engaged in deceptive practices by promoting 'Autopilot' and 'Full Self-Driving' as autonomous technologies, despite the systems operating at SAE Level 2, necessitating full driver attention at all times.
Cox recommended suspending Tesla's licenses to sell and manufacture vehicles in California for 30 days, but the DMV opted not to impose the manufacturing penalty, focusing instead on the dealer license. Tesla, based in Austin, Texas, but with a major factory in Fremont, California, will have a 90-day period to update its marketing materials to clearly convey the limitations of its driver-assistance features.
'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,' said Steve Gordon, director of the California DMV. The action stems from a 2023 complaint against Tesla for misleading advertising, including a 2020 video showing a car driving autonomously that remained on the company's website for nearly four years.
Tesla dismissed the ruling on X, stating: '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 already renamed its advanced package to 'Full Self-Driving (Supervised)' and includes warnings in its owner's manual.
This case highlights ongoing scrutiny of Tesla's self-driving claims, amid federal investigations into crashes involving Autopilot and lawsuits, including a recent Florida jury awarding over $240 million in damages for a fatal 2019 accident. California, Tesla's largest U.S. market, underscores the stakes for the electric vehicle maker facing declining sales and increased competition.
