The California Department of Motor Vehicles moved one step closer to enacting a staggering 30-day ban on Tesla vehicle sales, vigorously arguing during a weeklong hearing that the company misled consumers over the capabilities of its "Full Self-Driving" and "Autopilot" technologies, with deadly results, Business Insider reported.
"These labels and descriptions represent specifically that [Tesla]'s vehicles will operate as autonomous vehicles, which they could not and cannot do," said Rob Bonta, the California attorney general, per The News Wheel.
What's happening?
In 2022, the California DMV filed a formal accusation alleging that Tesla "made or disseminated statements that are untrue or misleading, and not based on facts, in advertising vehicles as equipped, or potentially equipped, with advanced driver assistance system (ADAS) features."
Specifically, the DMV accused Tesla of using names and messaging that strongly indicate its cars can operate fully autonomously without the need for human monitoring or intervention.
"But vehicles equipped with those ADAS features could not at the time of those advertisements, and cannot now, operate as autonomous vehicles," the accusation said.
After years of delay, in mid-July, the DMV finally got the chance to make its case before an administrative judge, arguing that Tesla advertised its driver-assist features as if they offered full autonomy while saying otherwise in the fine print.
In making its case, the DMV cited Tesla's own ads, including one stating, "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."
"To me, 'Autopilot' means it can drive itself or do things on its own," testified Melanie Rosario, commander-sergeant of the DMV Valley Area Command, per Business Insider.
Lawyers for Tesla argued that the company never claimed its vehicles could operate fully independently of a human operator.
"Cars with Full Self-Driving capabilities are currently not capable of driving themselves," Matthew Benedetto, an attorney representing Tesla, said during the hearing, Business Insider reported.
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The hearing came at a crucial time for Tesla, as the company's recent sales slump continued through the second quarter of 2025. In the period from April through June, the EV maker's net income dropped 16% compared to a year prior, The Wall Street Journal reported.
As the nation's most populous state, California represents a crucial market for EV makers. With Tesla registrations in the state already dropping more than 20% during the first quarter of 2025, per the California Energy Commission, a 30-day ban on sales could be tough for Tesla to bounce back from.
The outcome of the DMV's accusation also has broader implications for the future of self-driving technology, how it operates, and who is legally responsible when it fails.
Bryan Walker Smith, a member of the Society of Automotive and Aerospace Engineers who testified as an expert witness at the Tesla hearing, called the difference between driver-assistance technology and fully autonomous self-driving "a dam that separates the land from the sea."
"Every driver needs to know without ambiguity or doubt or any confusion an answer to this basic question: am I driving?" Smith testified, per Business Insider.
In the San Francisco Bay Area alone, Tesla autonomous-driving technology has been involved in several major incidents, including at least one fatal wreck.
In 2018, Walter Huang, an engineer for Apple, died after his Tesla operating in Autopilot mode crashed in Mountain View, California. Later investigations revealed that Huang had complained about the Autopilot's performance prior to the crash, according to ABC-affiliate KGO.
Another example came in 2022, when a Tesla came to an abrupt stop while driving at highway speeds on the Bay Bridge connecting San Francisco and Oakland, resulting in an eight-car pileup. The driver said the Tesla had been operating in "Full Self-Driving" mode at the time of the incident, per KGO.
What's being done about the safety of autonomous vehicles?
Tesla has made some improvements in the time since the aforementioned accidents, though improvements do not change whether the company was liable for those cases. With Tesla already having rolled out a test fleet of autonomous robotaxis in Austin, Texas, and seeking to soon do the same in San Francisco, observers of autonomous-vehicle technology are watching the California proceedings closely.
In the absence of comprehensive federal regulation, autonomous vehicles in the U.S. largely have been regulated on a state-by-state basis, according to the law firm Frost Brown Todd.
This patchwork regulatory framework is bad for companies, which require clear, consistent guidelines that they can design their technologies to comply with. It is also bad for consumers, many of whom may lack a clear understanding of what these technologies are capable of and what risks they entail.
To help fill this regulatory void, you can use your voice and contact your elected representatives in Washington, telling them that you think developing federal safety standards for autonomous vehicles should be a top priority.
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