California puts Tesla sales ban on hold over autopilot claims
California regulators have put a planned suspension of Tesla’s vehicle sales on hold, granting the electric carmaker extra time to address allegations that it misled consumers about its self-driving technology.
The California Department of Motor Vehicles (DMV) had ordered a 30-day suspension of Tesla’s manufacturing and sales licenses, adopting recommendations from an administrative judge. However, the agency immediately issued a 90-day stay, effectively pausing the penalty while Tesla works to remedy the situation, News.Az reports, citing Reuters.
The case centers on Tesla’s use of the terms “Autopilot” and “Full Self-Driving” (FSD). The DMV accused the company of overstating the capabilities of its driver-assistance systems, arguing that the names falsely suggest the vehicles can operate autonomously.
Tesla has consistently denied the claim. A lawyer for the company told regulators that Tesla has “clearly and consistently” explained to customers that Autopilot and FSD require active human supervision.
Judge Juliet Cox proposed the suspension, which the DMV adopted but then paused. DMV Director Steve Gordon said the agency wanted to give Tesla “one more chance” to correct what it sees as misleading statements.
To prevent the suspension from taking effect, the DMV said Tesla must either:
Stop using the Autopilot name for its driver-assistance software, or
Provide proof that its vehicles can operate without active human monitoring.
Tesla also has the option to appeal the decision or seek court review by February 14. The suspension of its manufacturing license has been stayed indefinitely.
The decision offers relief to Tesla at a time when EV makers are facing slowing demand following the expiry of key tax credits. It also comes as CEO Elon Musk increasingly bets Tesla’s future on robotaxis, self-driving software, and humanoid robots — areas where regulatory scrutiny is intense.
In a statement, Tesla said the order was about consumer protection and claimed that “not one single customer came forward to say there’s a problem,” adding that sales in California will continue uninterrupted.
The DMV said its focus has narrowed mainly to the Autopilot name, noting that Tesla has already modified how it markets Full Self-Driving by adding the term “Supervised.”
For now, Tesla remains free to sell cars in its largest U.S. market — but the clock is ticking on whether it will change one of its most controversial product names.
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