Elon Musk’s company may temporarily lose its permission to sell electric cars in its largest market in the United States. The California Department of Motor Vehicles wants to suspend Tesla’s license to sell cars in the state. The reason — a lawsuit over misleading advertising, in particular, the Autopilot and Full Self-Driving (FSD), which the company promotes as systems with a high level of autonomy.
The essence of the claims against Tesla
The California Department of Motor Vehicles is accusing Tesla and its CEO of misrepresenting the company’s driver assistance systems (ADAS). The regulator claims that the names Autopilot and Full Self-Driving are misleading in themselves, as they give the impression that the car is able to drive itself completely autonomously without human intervention. Back in 2021, the regulator launched an investigation, and in 2022, it officially asked Tesla to clarify incorrect statements in public statements.
In particular, the California Department of Motor Vehicles was outraged by the following wording from Tesla’s marketing materials:
«The system is designed for short and long trips without the need for driver intervention.»
and
«From home ─ All you have to do is get in the car and tell it where to go. If you don’t say anything, the car will look at your calendar and take you there as if it were your intended destination. Your Tesla will calculate the best route, navigating city streets, complex intersections, and highways. Arrival ─ When you arrive at your destination, simply get out at the entrance and your car will enter parking search mode, automatically find a spot and park itself. One tap of your phone will bring it to you.»
As a reminder, FSD has repeatedly led to accidents. For example, Cybertruck with FSD crashes into a poleand then the carTesla on autopilot suddenly drove off the roadThe car crashed into a tree and overturned.
The company tries to defend itself by claiming that it always warns drivers to be attentive at all times. This seems to cancel its misleading statements about the car’s full autonomy. In addition, Tesla hints that «has been advertising FSD in the same way as» for so many years, and if no questions have arisen before, it is supposedly allowed to continue doing so. But the court did not find this argument convincing, and the case went to trial last year.
Court
This week, a five-day hearing is underway in court, at which the California Department of Motor Vehicles is asking for the suspension of Tesla’s manufacturing and dealer licenses for at least 30 days. The regulator also requires the company to pay compensation to affected consumers, the amount of which will be determined during a separate hearing.
Among the key witnesses is Melanie Rosario, a sergeant and commander of one of the units of the California Department of Motor Vehicles. She will present the results of the investigation into Tesla’s claims about ADAS functions. Professor Bryant Walker Smith, a legal expert and member of the SAE Committee on Automated Driving Standards, will also speak. He will explain how to interpret the language used by Tesla and how it corresponds to the real capabilities of the system.
If the court grants the Department’s request, Tesla will not be able to sell electric vehicles in California for 30 days. And this could seriously affect sales results in the current quarter. Although even without such restrictions, Tesla has recently experienced a decline in sales in key markets:Europe and China. However, the company was hoping to improve the situation due to expected record sales in the United States — in particular, due to the expected expiration of the federal tax credit for electric vehicles. And California is Tesla’s largest market in the U.S., so even a temporary halt in sales could have serious financial consequences.
Source: electrek
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