California threatens Tesla with 30-day suspension of sales license for
deceptive self-driving claims
[December 18, 2025] By
MICHAEL LIEDTKE
SAN FRANCISCO (AP) — California regulators are threatening to suspend
Tesla's license to sell its electric cars in the state early next year
unless the automaker tones down its marketing tactics for its
self-driving features after a judge concluded the Elon Musk-led company
has been misleading consumers about the technology's capabilities.
The potential 30-day blackout of Tesla's California sales is the primary
punishment being recommended to the state's Department of Motor Vehicles
in a decision released late Tuesday. The ruling by Administrative Law
Judge Juliet Cox determined that Tesla had for years engaged in
deceptive marketing practices by using the terms “Autopilot” and “Full
Self-Driving” to promote the autonomous technology available in many of
its cars.
After presiding over five days of hearings held in Oakland, California
in July, Cox also recommended suspending Tesla's license to manufacture
cars at its plant in Fremont, California. But California regulators
aren't going to impose that part of the judge's proposed penalty.
Tesla will have a 90-day window to make changes that more clearly convey
the limits of its self-driving technology to avoid having its California
sales license suspended. After California regulators filed its action
against Tesla in 2023, the Austin, Texas, company already made one
significant change by putting in wording that made it clear its Full
Self-Driving package still required supervision by a human driver while
it's deployed.
“Tesla can take simple steps to pause this decision and permanently
resolve this issue — steps autonomous vehicle companies and other
automakers have been able to achieve," said Steve Gordon, the director
of the California Department of Motor Vehicles.
In a post on Musk's X service, Tesla brushed off the decision as
regulatory overkill. “This was a ‘consumer protection’ order about the
use of the term ‘Autopilot’ in a case where not one single customer came
forward to say there’s a problem. Sales in California will continue
uninterrupted,” the company said.
The automaker has already been plagued by a global downturn in demand
that began during a backlash to Musk's high-profile role overseeing cuts
in the U.S. government budget overseeing the Department of Government
that President Donald Trump created in his administration. Increased
competition and an older lineup of vehicles also weighed on Tesla sales,
although the company did revamp its Model Y, the world’s bestselling
vehicle, and unveil less-expensive versions of the Model Y and Model X.
Although Musk left Washington after a falling out with Trump, the
fallout has continued to weigh on Tesla's auto sales, which had
decreased by 9% from 2024 through the first nine months of this year.
[to top of second column] |
Tesla vehicles line a parking lot at the company's Fremont, Calif.,
factory on Aug. 5, 2025. (AP Photo/Noah Berger, File)
 Despite the slump and the threatened
sales suspension in California, Tesla's stock price touched an
all-time high $495.28 during Wednesday's early trading before
backtracking later to fall below $470. Despite that reversal,
Tesla's shares are still worth slightly more than they were before
Musk's ill-fated stint in the Trump administration — a “somewhat
successful” assignment he recently said he wouldn't take on again.
The performance of Tesla's stock against the backdrop of eroding
auto sales reflects the increasing emphasis that investors are
placing on Musk's efforts to develop artificial intelligence
technology to implant into humanoid robots and a fleet of
self-driving Teslas that will operate as robotaxis across the U.S.
Musk has been promising Tesla's self-driving technology would
fulfill his robotaxi vision for years without delivering on the
promise, but the company finally began testing the concept in Austin
earlier this year, albeit with a human supervisor in the car to take
over if something went awry. Just a few days ago, Musk disclosed
Tesla had started tests of its robotaxis without a safety monitor in
the vehicle.
California regulators are far from the first critic to accuse Tesla
of exaggerating the capabilities of its self-driving technology in a
potentially dangerous manner. The company has steadfastly insisted
that information contained in its vehicle's owner's manual on its
website have made it clear that its self-driving technology still
requires human supervision, even while releasing a 2020 video
depicting one of its cars purportedly driving on its own. The video,
cited as evidence against Tesla in the decision recommending a
suspension of the company's California sales license, remained on
its website for nearly four years.
Tesla has been targeted in a variety of lawsuits alleging its
mischaracterizations about self-driving technology have lulled
humans into a false of security that have resulted in lethal
accidents. The company has settled or prevailed in several cases,
but earlier this year a Miami jury held Tesla partly responsible for
a lethal crash in Florida that occurred while Autopilot was deployed
and ordered the automaker to pay more than $240 million in damages.
All contents © copyright 2025 Associated Press. All rights reserved
 |
