Tesla Faces Compliance Ultimatum Over Autopilot Claims as California Tightens Marketing Scrutiny

California’s Department of Motor Vehicles has determined that Tesla’s Autopilot marketing messaging violates state advertising standards, with regulators issuing a structured compliance directive to address the issues. The administrative ruling stems from formal charges filed in 2022 alleging that the company’s promotional materials for Autopilot and Full Self-Driving systems create false impressions about vehicle autonomy capabilities.

The core issue centers on terminology and consumer perception. Regulators determined that phrases like “Full Self-Driving” could lead drivers to believe their vehicles operate without human intervention, when in reality the systems require constant driver attention and readiness to take control. The presiding judge found this contradiction violates California civil and vehicle codes, particularly regarding the accuracy of autonomous operation claims both from technological and legal standpoints.

The DMV has structured the enforcement action in two phases. Tesla now has 60 days to revise all marketing claims and remove misleading language surrounding Autopilot and Full Self-Driving functionality. Should the company fail to correct these statements within that window, California will implement a 30-day suspension of Tesla’s vehicle sales license within the state. Notably, the agency will not suspend manufacturing operations, protecting Tesla’s factory facilities from disruption.

In response to regulatory pressure, Tesla has already rebranded the feature to “Full Self-Driving (Supervised),” signaling acknowledgment of the supervision requirement. A company representative stated the order prioritizes consumer terminology accuracy and protection, emphasizing that no individual customer complaints formed the basis of the case. The DMV’s action similarly proceeded without citing specific consumer grievances.

This regulatory action arrives amid a separate federal class-action lawsuit accusing Tesla of systematically misrepresenting vehicle autonomy capabilities to drivers over multiple years. The timing also coincides with investor optimism around Tesla’s robotaxi strategy and autonomous technology roadmap. Market sentiment remained positive following the ruling—Tesla shares closed Thursday at $483.37, representing a 3.45% gain, with after-hours trading at $482.75, down 0.13% on NasdaqGS.