A California regulator has paused an order that would suspend Tesla’s sales in the state, marking another twist in a case accusing the electric-car maker of misrepresenting and overstating the capabilities of its self-driving features.
The decision temporarily shields Tesla from a potential halt in its largest U.S. market. The California Department of Motor Vehicles (DMV) had ordered a 30-day suspension of Tesla’s manufacturing and sales licenses, following a judge’s recommendation, but immediately put that plan on hold, DMV director Steve Gordon told reporters on Tuesday.
The DMV alleged that Tesla misled consumers by branding certain features Autopilot and Full Self-Driving (FSD), which the regulator contends imply autonomous operation. In a hearing, the DMV had argued to judge Juliet Cox of the state Office of Administrative Hearings that those names suggested the cars can operate without human supervision.
Gordon said the DMV wants to give Tesla one more opportunity to fix the situation and hopes the company will find a way to correct these misleading statements.
As a result, the DMV stayed the suspension of Tesla’s ability to sell vehicles for 90 days and kept the manufacturing license on hold indefinitely.
Tesla did not immediately respond to Reuters’ request for comment.
Previously, a Tesla attorney asserted that the company has “clearly and consistently” explained that vehicles equipped with Autopilot and FSD require driver supervision and are not fully autonomous, stating, “Tesla has never misled consumers. Never. And not even close.”
The DMV’s Steve Gordon noted that Tesla can pursue an appeal with the agency or potentially through the courts.
The stay provides temporary relief for Tesla, even as the broader case raises questions about how the company markets its autonomous features.
Tesla, led by Elon Musk, has faced a sales slump as key tax credits expired and demand cooled, a challenge shared by other electric-vehicle makers.
Musk has redirected Tesla’s strategy toward robotaxi ventures backed by a version of its self-driving software, along with humanoid robots. Much of Tesla’s valuation rests on these bets.
In practice, Autopilot assists with accelerating, braking, and lane-keeping on highways, while FSD is designed to enable lane changes, navigation of traffic signals, and city street driving.
Tesla has added the label “supervised” to FSD for passenger vehicles. An unsupervised version of the software is used to move cars from production lines to delivery lots at some factories. The company also uses FSD to run a robotaxi service in Austin that includes human safety monitors in the front passenger seat and remote support.
