Tesla Faces 30-Day Sales Risk Over Autopilot Misleading Ads

California regulators ordered Tesla to  revise how it markets its driver-assistance and automated driving features, warning that the electric vehicle maker could face a 30-day sales suspension in the state if it fails to comply. The California Department of Motor Vehicles said the action follows a ruling that Tesla misled consumers about the capabilities of its Autopilot and Full Self-Driving (FSD) systems.

According to the DMV, Administrative Law Judge Juliet Cox found that Tesla “misrepresented the level of automation currently available” in its vehicles for years, leading buyers to believe the cars were more capable of driving themselves than they actually are. Cox recommended a 30-day suspension of vehicle sales and production in California as a sanction. The DMV noted it has not imposed the penalty immediately and has given Tesla 60 days to revise its marketing language.

The agency clarified that it does not intend to halt production at Tesla’s Fremont factory, a central part of the company’s US manufacturing footprint. California is Tesla’s largest domestic market.

“The DMV’s decision today confirms that the department will hold all vehicle manufacturers to the highest safety standards to protect California drivers, passengers and pedestrians,” said DMV Director Steve Gordon in an emailed statement. “Tesla can take simple steps to stop this decision and resolve this issue permanently, steps that autonomous vehicle companies and other automakers have achieved in California’s innovation market.”

The case follows months of hearings in Sacramento, where technical experts testified that Tesla’s systems require near-constant driver supervision and do not match the operational capabilities of autonomous taxi services, such as those operated by Waymo. Tesla’s software is designed to assist drivers rather than replace them, despite branding that regulators said suggests a higher level of automation.

Tesla has pursued a camera-only approach for its automated driving systems, avoiding radar and lidar sensors that many autonomous vehicle developers use to improve perception in low light and complex environments. Federal safety regulators recently expanded an ongoing investigation into Tesla’s FSD software.

A 30-day sales suspension in California could reduce Tesla’s revenue by tens of millions of dollars in 2026, analysts say, at a time when electric vehicle sales growth has slowed. The potential penalty also coincides with Tesla’s push to develop a robotaxi service to compete with Waymo. The company has been offering paid rides in Austin using a fleet of 29 vehicles with a human safety driver and has begun limited testing of fully autonomous versions without paying passengers.