California threatens Tesla with 30-day suspension of sales license for deceptive self-driving claims

California regulators are moving to suspend Tesla's license to sell vehicles in the state for up to 30 days early next year unless the company broadens how it communicates the limits of its self-driving features. The action follows a ruling by Administrative Law Judge Juliet Cox, who found that Tesla misled consumers about the capabilities of Autopilot and Full Self-Driving.

Under Cox's proposed remedy, Tesla would have a 90-day window to revise its marketing and product pages to more clearly reflect that supervision is required and that the technology does not make the car autonomous. The Department of Motor Vehicles would not adopt at this time the judge's recommendation to suspend Tesla's license to manufacture cars at its Fremont, California, plant. The 30-day sales suspension would be the primary penalty under consideration if the automaker fails to comply. After regulators filed their action against Tesla in 2023, the company had already added wording that clarified Full Self-Driving requires supervision; the DMV said the change was not sufficient to resolve all concerns.

The regulator's decision comes as Tesla faces ongoing scrutiny over how its advertising describes Autopilot and Full Self-Driving. Cox cited a 2020 promotional video and other materials that she said portrayed the technology as capable of operating without human oversight in some contexts, inconsistent with the company’s manuals and public statements. Tesla has argued that its owner manuals and website already warn that supervision is required, though the judge separately emphasized the need for clearer communications in marketing.

Tesla has faced a broad array of legal challenges tied to Autopilot and its marketing. A number of lawsuits have accused the company of giving consumers a false sense of security about the technology. Earlier this year, a Miami jury held Tesla partly responsible for a fatal crash involving Autopilot and ordered more than $240 million in damages. Tesla has disputed liability in several of these cases, and the company continues to say drivers are responsible for monitoring the system and for their own safety.

Beyond the regulatory case, investors have watched Tesla’s stock as the company doubles down on its longer-term ambitions, including artificial intelligence initiatives and a robotaxi concept. The shares touched an all-time intraday high of $495.28 on Wednesday before retreating later in the session, trading above levels seen before some of Elon Musk’s political and policy-related moves. Analysts note that demand has cooled in some markets amid competition and an older lineup, though Tesla has refreshed models and introduced lower-priced variants.

Steve Gordon, director of the California Department of Motor Vehicles, said the agency believes Tesla can resolve the issue by making clear the limitations of its self-driving technology and that the company has room to act quickly to address consumer concerns. “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," Gordon said. The department did not indicate when a final decision would be issued, but it signaled that the 90-day period would begin once changes are implemented and accepted by regulators.