Tesla avoids California license suspension after marketing changes

The California Department of Motor Vehicles (DMV) has confirmed it will not suspend Tesla’s sales and manufacturing licenses for 30 days. The decision, issued late Tuesday, comes after the automaker complied with regulatory demands to stop using the term “Autopilot” in the marketing of its electric vehicles in California. By taking these corrective actions, Tesla has avoided a suspension that would have interrupted its dealership and manufacturing operations in the state.

The resolution brings an end to an administrative case that had been dragging on for nearly three years. The conflict began in November 2023, when the DMV filed formal accusations against Tesla. The regulator alleged that the company violated state law through the “deceptive marketing of Autopilot” and by using the “misleading term ‘Autopilot’” to describe its driver-assistance features. The dispute escalated to the California Office of Administrative Hearings, where an administrative law judge ruled in December to support the DMV’s request for a 30-day license suspension. However, the DMV did not immediately enforce the penalty, instead granting Tesla a period of 60 days to comply with the ruling.

The DMV confirmed that Tesla has since taken corrective action to stop using the term in its California marketing. In a statement, the DMV noted: “Tesla had previously modified its use of the term ‘Full Self-Driving’ to clarify that driver supervision is required. By taking this prescribed action, Tesla will avoid having its dealer and manufacturer licenses suspended in the state for 30 days by the DMV.”

In addition to the marketing adjustments in California, Tesla discontinued Autopilot in the U.S. and Canada in January. The automaker has pivoted its strategy toward its Full Self-Driving (FSD) Supervised system. The company has also restructured how customers pay for the software. Until February 14, FSD Supervised required an $8,000 one-time fee. Tesla has since replaced that option with a monthly subscription fee of $99. According to Tesla CEO Elon Musk, this subscription fee is expected to increase as the system becomes more capable.

Why it matters

This resolution highlights the growing regulatory scrutiny on driver-assistance systems and the tangible impact of state-level enforcement on how automakers market their software features.