Judge Rules Tesla Misled Customers About Self-Driving Cars

What Happened?

An administrative law judge in California ruled that Tesla engaged in deceptive advertising and misled customers about its vehicles' self-driving capabilities. The California Department of Motor Vehicles (DMV) said Tesla’s use of terms like ‘Autopilot’ and ‘Full Self-Driving’ to describe its advanced driver assist systems ‘is misleading and violates state law.’

California’s DMV ordered a thirty-day suspension of Tesla’s license to sell cars in the state if Tesla does not fix marketing concerns surrounding the term ‘Autopilot’ within sixty days. A Tesla spokesperson denied that the company misleads customers about self-driving vehicles.

Why it Matters

If Tesla doesn’t comply, the ruling could lock Tesla out of the largest electric vehicle market in the United States, and one of the largest markets for conventional cars as well. At the core of the issue is the fact that Tesla uses terms like self-driving and autopilot to describe features in some of its vehicles, even though those vehicles require a human driver to be in control one hundred percent of the time. Tesla claims it has always informed customers that human drivers have to operate its vehicles even while using software like self-driving or autopilot.

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Sales of Tesla have already been down throughout most of 2025, and the California ruling could be another blow to the company’s fortunes. According to Business Insider, Attorney Matthew Benedetto, who is a lawyer for Tesla, informed Administrative Judge Juliet E. Cox on Monday that the company never tried to conceal the fact that its vehicles cannot fully drive themselves. And has always informed buyers that they ‘cannot fully rely’ on self-driving or autopilot. 

California’s DMV countered with a Tesla ad informing potential customers that with the company's self-driving features, ‘all you need to do is get in and tell your car where to go.’ This case may be an example of why reading fine print is important for consumers. Because, while terms like self-driving and autopilot are prominently displayed in advertisements, much smaller or rapidly spoken fine print explains that human drivers must always be in control of those cars. 

Even if Tesla is technically correct that they haven’t concealed the fact that human drivers must always be in control of their vehicles. Promoting those same vehicles as self-driving or capable of autopilot certainly appears designed to convince consumers that those vehicles have more autonomous capabilities than they possess. 

How it Affects You

Other self-driving companies, such as Waymo, have similar-sounding products that can deliver actual autonomous ride experiences for passengers, giving rise to the possibility that Tesla is trying to convince potential buyers its vehicles are just as autonomous as Waymo’s, even though they aren’t. While the California ruling is a setback for Tesla, if it complies with the court’s decision, the damage could be minimized. 

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