Tesla faces 30-day California sales ban over deceptive Autopilot and Full Self-Driving claims

Tesla Faces Sales License Suspension Over Deceptive Marketing

California regulators are threatening to suspend Tesla

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's license to sell electric cars in the state early next year following a judicial determination that the company misled consumers about its autonomous technology capabilities. Administrative Law Judge Juliet Cox issued a ruling late Tuesday concluding that Tesla

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engaged in deceptive marketing

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practices for years by using the terms Autopilot and Full Self-Driving

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to promote its vehicles. The potential 30-day blackout represents the primary punishment recommended to the California Department of Motor Vehicles

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after five days of hearings in Oakland in July.

90-Day Window to Comply With Regulators

Tesla

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now has 90 days to make changes that more clearly convey the limitations of its self-driving technology

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to avoid the sales license suspension

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. Steve Gordon, director of the California Department of Motor Vehicles, stated that "Tesla can take simple steps to pause this decision and permanently resolve this issue -- steps autonomous vehicle companies and other automakers have been able to achieve." While Judge Cox also recommended suspending Tesla's manufacturing license at its Fremont plant, California regulators

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have chosen not to impose that portion of the penalty. The company has already made one significant change since California regulators filed their action in 2023, adding wording to clarify that its Full Self-Driving package requires human supervision

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while deployed.

Pattern of Misleading Consumers About Autonomous Features

The Administrative Law Judge ruling

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found that Tesla

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had been misleading consumers

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through its marketing terminology despite information in owner's manuals indicating the technology requires human oversight. Evidence cited in the decision included a 2020 video depicting one of Tesla's cars purportedly driving on its own, which remained on the company's website for nearly four years. California regulators are not the first to accuse the Elon Musk

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-led company of exaggerating the capabilities of its self-driving technology. Tesla

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has faced multiple lawsuits

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alleging its mischaracterizations lulled drivers into false security, resulting in lethal accidents. Earlier this year, a Miami jury held Tesla partly responsible for a fatal crash in Florida while Autopilot was deployed, ordering the automaker to pay more than $240 million in damages.

Impact on Tesla's Business and Investor Confidence

The threatened suspension comes as Tesla

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contends with a 9% decline in auto sales from 2024 through the first nine months of this year. Despite the regulatory threat and sales slump, Tesla's stock price

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touched an all-time high of $495.28 during Wednesday's early trading before falling below $470. This stock performance reflects the emphasis investors

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place on Musk's efforts to develop artificial intelligence technology

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for humanoid robots

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and a fleet of self-driving robotaxis

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across the U.S. Musk has promised Tesla's self-driving technology would fulfill his robotaxi vision for years, and the company began testing the concept in Austin earlier this year with a human supervisor. Just days ago, Musk disclosed Tesla had started tests without a safety monitor

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in the vehicle, signaling the company's continued push toward fully autonomous operations despite ongoing regulatory scrutiny over deceptive self-driving claims

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.