California’s Department of Motor Vehicles adopted an administrative law judge’s proposed decision finding that Tesla’s marketing of “Autopilot” and “Full Self-Driving Capability” was misleading under California law. This was an agency action, not a court judgment. Tesla later changed its California terminology to “Full Self-Driving (Supervised)” and stopped using “Autopilot” in California marketing, avoiding the threatened license suspensions; it has also challenged the DMV order in court.
What the California DMV found
The DMV’s cases, numbered 21-02188 and 21-02189, concerned Tesla’s marketing of advanced driver-assistance features. The agency said written materials, primarily on Tesla’s website beginning in May 2021, used the terms “Autopilot” and “Full Self-Driving Capability” in a misleading way. It also cited the claim that “The system is designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.” The DMV said vehicles with these features could not operate autonomously when the advertising appeared and could not do so at the time of its decision. These are the agency’s findings, not a separate court determination. California DMV, Dec. 16, 2025
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The DMV filed accusations against Tesla’s manufacturer and dealer licenses in November 2023. After a five-day hearing before an administrative law judge from July 21 through 25, 2025, the judge issued a proposed decision on Nov. 20, 2025. The DMV adopted the findings on Dec. 16, 2025, while changing the proposed penalties.
What penalties were proposed and what the DMV ordered
| Stage | Manufacturer license | Dealer license |
|---|---|---|
| ALJ proposed decision, Nov. 20, 2025 | 30-day suspension | 30-day suspension |
| DMV decision, Dec. 16, 2025 | Suspension permanently stayed | Tesla had 60 days to address “Autopilot”; failure would trigger a 30-day suspension |
| DMV update, February 2026 | No suspension after corrective action | No suspension after corrective action |
The DMV reported in February 2026 that Tesla had stopped using “Autopilot” in California marketing and that the corrective action avoided the threatened suspensions. Tesla had also changed “Full Self-Driving” references to “Full Self-Driving (Supervised).” California DMV, February 2026 Associated Press, Feb. 18, 2026
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Did Tesla have to stop selling cars in California?
No. The order concerned Tesla’s California manufacturer and dealer licenses and its marketing terminology; it did not require Tesla to stop selling cars. The DMV’s modified decision stayed the manufacturer-license suspension and made the dealer-license suspension contingent on Tesla failing to address “Autopilot” within 60 days. The DMV later said the corrective action meant neither suspension would take effect.
Does Full Self-Driving mean the car drives without supervision?
The DMV said the vehicles equipped with the features at issue could not operate autonomously. The agency’s cited marketing language suggested that no action would be required from the person in the driver’s seat, but that was an advertised claim the DMV found misleading—not a statement of current capability. Tesla’s later California label, “Full Self-Driving (Supervised),” makes the supervision qualification explicit.
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Tesla’s court challenge is separate from the DMV decision
In February 2026, Tesla filed a verified petition seeking administrative mandamus and declaratory and injunctive relief. The company argues that the DMV order is unsupported and legally flawed, including that the agency presented no consumer witnesses, the record did not establish actual consumer confusion, and disclosures about driver supervision were provided. Those are Tesla’s litigation claims, not findings by a court, and the filing did not itself overturn the DMV order. Tesla verified petition, February 2026
The administrative licensing case should not be confused with a separate federal consumer class action involving driver-assistance features. Tesla’s June 30, 2026 quarterly filing said oral argument in a Ninth Circuit appeal concerning class certification was scheduled for Aug. 31, 2026; it does not establish what happened at that argument or the later status of either proceeding. Tesla Form 10-Q, quarter ended June 30, 2026
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