Tesla keeps dealer and manufacturer license in California after marketing ‘corrective action’
By Teresa Moss
on February 24, 2026
Announcements
Tesla has avoided having its dealer and manufacturer license suspended in California after taking “corrective action,” according to a California Department of Motor Vehicles (DMV) press release.
The DMV found Tesla in violation of state law in December for misleading marketing of its electric vehicles, the release says. Terms such as “Autopilot” were used in marketing of the vehicles with features that still require driver supervision.
According to the DMV, Tesla has modified its use of the term “full-self driving (supervised)” to clarify that driver supervision is required.
Tesla avoided its licenses being suspended for 30 days.
“The DMV is committed to safety throughout all California’s roadways and communities,” said DMV Director Steve Gordon in the release. “The department is pleased that Tesla took the required action to remain in compliance with the State of California’s consumer protections.”
Following an administrative law judge (ALJ)’s decision in the Tesla administrative case in December, the DMV imposed a permanent stay of the suspension on Tesla’s licenses, giving the company 60 days to act regarding its use of the term “Autopilot.”
“California has zero tolerance for misleading advertising that puts safety at risk,” the release says. “When companies make false claims about vehicle capabilities, they endanger lives, and the state will hold them accountable.”
The release states that beginning in May 2021, Tesla’s marketing materials on its website used product labels and descriptions such as “Autopilot” and “Full Self-Driving Capability” and stated, “The system is designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.”
However, the vehicles equipped with those ADAS features could not, at the time of those advertisements, and cannot currently, operate as autonomous vehicles, the release says.
DMV filed accusations against Tesla’s manufacturer and dealer licenses in November 2023. The California Office of Administrative Hearings held a hearing before the ALJ in July.
China has issued ethical guidelines for autonomous driving technology, including bans on false information in research results. It banned automakers from using the terms “autonomous driving” and “smart driving” in advertisements.
It comes after a fatal crash involving Xiaomi’s SU7 sedan that has triggered safety concerns, Reuters reports.
“Preliminary findings showed the Xiaomi car caught fire after hitting a cement roadside pole at a speed of 97 kph (60 mph), seconds after its driver took over control from the advanced driving assistance system (ADAS),” Reuters says.
Forbes reports that while the cause of the crash isn’t clear, Chinese regulators’ actions show that drivers need to know what their car can actually do. It notes that the UK government’s 2024 Automated Vehicles Act made it an offense to use misleading language in marketing such technologies.
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Photo courtesy of VV Shots/iStock
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