Tesla shares fell 4.62% amid California DMV scrutiny over Autopilot and Full Self-Driving terms

Tesla shares fell 4.6175% in pre-market trading on December 18, 2025, amid renewed regulatory scrutiny over its use of terms like “Autopilot” and “Full Self-Driving,” which California’s DMV alleges mislead consumers about the capabilities of its driver-assist systems.

The California Department of Motor Vehicles (DMV) has threatened to suspend Tesla sales in the state for 30 days unless the company revises its marketing. The agency cited past enforcement actions against Tesla for misleading claims, including a 2023 dispute over branding that remains unresolved. This regulatory pressure follows a record high for Tesla’s stock earlier in the week, raising concerns about potential legal challenges and broader implications for its autonomous vehicle ambitions.

Tesla has defended its terminology, arguing no customer complaints have been raised and asserting that sales will continue uninterrupted. However, the company faces a high-stakes legal battle to avoid compliance with a 90-day delay in enforcement. Analysts note California’s significance as a key market and production hub, with any disruption potentially impacting Tesla’s revenue and market valuation. The outcome could also influence regulatory scrutiny of autonomous driving claims across the industry.