Tesla has initiated a lawsuit against the California Department of Motor Vehicles (DMV), challenging the agency's assertion that the electric vehicle manufacturer engaged in false advertising regarding its advanced driver-assistance systems, Autopilot and Full Self-Driving (FSD). This legal action follows a prior dispute where the DMV threatened to suspend Tesla's operational license in California over these advertising concerns. Tesla had previously altered its marketing language to avoid this penalty, but is now pushing back against the foundational claims of misrepresentation.
According to court documents, Tesla's legal representatives argue that the DMV's accusations of consumer confusion surrounding the capabilities of these technologies lack substantial proof. The filing highlights that the agency's case primarily relied on the testimony of a single law professor, rather than direct consumer accounts. Tesla maintains that it has consistently clarified that neither Autopilot nor FSD Supervised systems render vehicles fully autonomous, thereby refuting claims of deceptive practices.
The core of the conflict stems from the California DMV's previous legal action against Tesla, which sought a temporary cessation of the company's sales and manufacturing activities within the state. The DMV alleged that Tesla misled customers about the true extent of its systems' functionalities. Although a court initially sided with the DMV, the agency ultimately decided against imposing the license suspension. Instead, it granted Tesla a 90-day window to adjust its marketing strategies, a directive which Tesla complied with to avert the suspension.
Meanwhile, Tesla's Supervised FSD system, which relies solely on camera vision in contrast to lidar-based alternatives, has accumulated an impressive record of over 8.2 billion miles driven. Despite this extensive usage, questions persist regarding the system's overall safety and efficacy. Recent reports indicate five additional incidents involving Tesla's Robotaxi service in Austin during January 2026, further fueling discussions about the technology's readiness for widespread autonomous operation.
From a market perspective, Tesla continues to demonstrate strong momentum in Benzinga Edge Rankings, indicating a favorable long-term price trend for its stock. This ongoing legal battle with the California DMV represents a significant challenge for the company, as it navigates regulatory scrutiny while simultaneously advancing its autonomous driving ambitions and maintaining investor confidence.
In essence, Tesla's lawsuit against the California DMV underscores a broader debate within the automotive industry concerning the responsible marketing and deployment of rapidly evolving autonomous driving technologies. The outcome of this legal dispute could set important precedents for how advanced driver-assistance systems are advertised and regulated, not just in California, but across the nation.