The California Department of Motor Vehicles has given Tesla 90 days to modify the marketing of its driver-assistance technology, warning that the electric carmaker could face a temporary ban on vehicle sales in the state if it fails to comply.
The DMV’s action stems from a ruling Tuesday by an administrative judge who found that terms such as “Autopilot” and “Full Self-Driving” in Tesla’s advertising could be misleading to consumers.
The agency’s order centers on Tesla’s continued use of the term “Autopilot,” directing the company to either make the technology fully autonomous or stop using the label.
The DMV is requiring Tesla to confirm that it has complied with the order. The ban on sales would last 30 days.
“We want to give them a chance,” DMV Director Steve Gordon told reporters this week about the 90-day compliance warning, SFGate reports. “You could argue, one more chance, to be able to remedy the situation.”
While the judge also suggested a broader manufacturing suspension, the DMV chose not to enforce a production halt at this time.
The dispute caps a years-long legal battle between Tesla and the California DMV. State regulators argue that the names Tesla uses for its advanced driver-assistance features may falsely imply that its vehicles are fully autonomous, when in fact drivers are still required to monitor the road and remain ready to take control.
Tesla’s driver-assistance systems can control basic driving functions, including steering, braking, and navigation, but require drivers to remain alert and ready to take over at all times.
While Tesla says its advertising is not misleading, it has already begun shifting its marketing and removing some related webpages.
Although some of Tesla’s promotional materials have shifted away from the “Autopilot” label toward terms like “Full Self-Driving (Supervised),” regulators say remnants of the older branding still appear and need to be addressed.
Tesla shares briefly fell about 2 percent after the DMV announcement, paring earlier gains from a viral video showing the company’s Robotaxi operating without a driver in Austin, Texas.
Tesla CEO Elon Musk confirmed that Robotaxi tests are now running without any occupants.
If a sales pause were imposed, Californians could still buy Teslas out of state, Gordon told SFGate though he expects the company to comply with the order, given its large investment and extensive sales presence in California.
“It would certainly be, I think, more efficient for Tesla to be in compliance and just continue to sell,” he told the outlet. “They have a huge footprint, I mean, 70-plus dealers in the state of California.”
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