Tesla pushes legal challenge over California self-driving ruling

Tesla, the electric vehicle and autonomous technology company led by Elon Musk, has escalated its long-running dispute with California regulators by filing a lawsuit aimed at overturning a key regulatory ruling that found its marketing of advanced driver-assistance systems misled consumers. The legal action targets a decision by the California Department of Motor Vehicles that determined the company’s use of the terms “Autopilot” and “Full Self-Driving” violated state law by implying capabilities its vehicles do not possess.

The complaint, lodged on 13 February, accuses the DMV of acting without adequate basis in labelling Tesla a “false advertiser” for nearly a decade of marketing its driver-assist features. Tesla argues that disclaimers about required human supervision were clear, and contends regulators knew of its branding practices for years without prior enforcement.

The escalation comes as one of the most contentious chapters in the company’s broader ambitions to transition from premium electric vehicles to a future dominated by robotaxi services — fully autonomous ride-hailing fleets that could radically reshape transportation. A favourable ruling on this case could clear a regulatory impediment to how Tesla markets its autonomous features and supports its long-term robotaxi strategy.

At issue is how Tesla has traditionally described its driver-assistance technology. Despite the evocative names “Autopilot” and “Full Self-Driving,” the systems are rated at SAE Level 2 automation, meaning human drivers must maintain control and attention at all times. Regulatory scrutiny has intensified in recent years amid concerns that the marketing inflated public expectations of autonomy, leading to safety risks on public roads and regulatory action.

The origins of the dispute trace back to 2021, when the California DMV launched an investigation into Tesla’s use of “Autopilot” and “Full Self-Driving” labels. An administrative law judge later ruled that the terminology was misleading and violated state consumer protection laws, recommending a temporary suspension of the company’s dealer and manufacturer licences within California. The DMV adopted the judge’s findings in December 2025, though it stayed the most severe penalties to allow Tesla an opportunity to correct its marketing.

Tesla moved swiftly to comply with the corrective order, discontinuing the use of the term “Autopilot” in its California marketing and clarifying its Full Self-Driving offerings as requiring ongoing driver oversight. The adjustments enabled the company to avert the threatened 30-day suspension of its licences, allowing it to continue sales and manufacturing operations in the state.

Despite this compliance, Tesla’s decision to pursue legal action underscores how significant the regulatory label is to its commercial and technological narrative. The company’s argument in court emphasises that the DMV never demonstrated actual consumer confusion and points to the regulator’s long awareness of the branding without prior enforcement.

The lawsuit reflects a broader context of mounting scrutiny over autonomous and advanced driver-assistance systems in the United States. At the federal level, the National Highway Traffic Safety Administration has been examining potential violations connected to Tesla’s Full Self-Driving software, including incidents of running red lights and improper lane behaviour, prompting extended investigatory deadlines. These probes add to legal and regulatory pressures that could influence consumer trust and industry dynamics.

Tesla’s defensive posture also coincides with legal setbacks in the civil courts. A federal jury upheld a significant $243 million verdict against the company in a fatal crash case involving its Autopilot system, and the automaker is understood to have settled additional lawsuits rather than risk further adverse jury decisions. Such outcomes highlight the real-world consequences of how autonomous capabilities are marketed and understood by consumers.

Critics say the terminology Tesla has used for its driver-assistance systems contributed to misperceptions about their true capabilities. Studies and advocacy groups have long pointed out that names like “Autopilot” and “Full Self-Driving” suggest a level of automation that vehicles do not actually achieve, potentially encouraging unsafe reliance on systems requiring active human engagement. Regulatory action in California and debates in other jurisdictions reflect ongoing efforts to align technology marketing with capabilities and safety standards.