California may halt Tesla sales over Autopilot safety concerns

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California regulators may suspend Tesla’s vehicle sales in the state over claims that the company has misled consumers about the capabilities of its Autopilot and Full Self-Driving (FSD) systems. The state’s Department of Motor Vehicles (DMV) filed a legal complaint accusing Tesla of engaging in deceptive marketing by naming its driver-assistance features “Full Self-Driving,” despite them requiring active driver supervision.

According to the complaint, Tesla’s promotional language could lead customers to overestimate the system’s autonomy, putting public safety at risk. This follows years of investigations, including a high-profile federal probe into fatal accidents linked to Tesla’s Autopilot.

The case, first filed in 2022, is now escalating with the DMV potentially revoking Tesla’s license to sell cars in California—its largest US market. Tesla has defended the FSD branding, arguing that disclaimers and driver instructions clarify the technology’s limitations.

California’s DMV counters that Tesla’s naming conventions and public statements amount to false advertising, violating state consumer protection laws. The DMV also notes that Tesla vehicles using FSD have been involved in multiple accidents and that the company’s software updates haven’t addressed key safety issues.

This legal action coincides with rising concerns about autonomous vehicle oversight, especially as Tesla pushes for wider FSD deployment through over-the-air updates. The outcome of the case could set a precedent for how driver-assist features are marketed across the industry.

As Tesla prepares for potential FSD licensing in international markets and a broader US rollout, the California decision could deal a reputational and commercial blow. A hearing is expected early next year.