Tesla Faces License Revocation in California Over Autopilot Claims

Tesla is currently embroiled in a five-day legal battle in Oakland, California, as the state's Department of Motor Vehicles (DMV) accuses the company of making false claims about the capabilities of its Autopilot and Full Self-Driving features. The DMV has filed a complaint seeking to suspend or revoke Tesla’s dealership license, alleging that the company misled consumers by claiming its vehicles could drive themselves, which they cannot do.

The hearing, which began this week, is being overseen by an administrative judge. This legal challenge comes at a time when Tesla is also facing a separate trial in Miami, where jurors are determining whether Autopilot contributed to a pedestrian's death in 2019. In that incident, a Tesla Model S driver, reportedly distracted, struck and killed a pedestrian while the car was on Autopilot. Tesla has denied responsibility in both the California DMV proceeding and the Miami trial.

The DMV’s complaint asserts that Tesla violated state law by advertising its driver-assistance systems as fully autonomous technology. The DMV cited company statements suggesting that the cars could make both short and long-distance trips without any driver intervention. However, the DMV maintains that Tesla vehicles do not and have not operated independently, and thus, the advertisements were misleading.

If the California regulators succeed in their case, Tesla would be barred from selling vehicles in the state, which is the largest car market in the United States. Elon Musk, Tesla’s CEO, has long positioned self-driving technology as the future of the company, promoting a robotaxi fleet and claiming that Tesla vehicles are the "safest cars ever made." The DMV, however, disputes these claims.

Tesla has countered the DMV’s accusations by arguing that the allegations infringe on free speech rights protected under the First Amendment. The company contends that regulators have ignored clear disclaimers and taken marketing messages out of context. In a February 2024 filing, Tesla stated, “Tesla repeatedly and explicitly makes clear that its vehicles are not autonomous and require active driver supervision.” Despite this, California regulators are pushing for significant consequences.

In the Miami trial, Tesla’s lawyers argued that any statements made about self-driving were meant to describe future goals, not current capabilities. They maintained that comments from Elon Musk and the company were predictions, not lies. However, this explanation was met with skepticism by Mary “Missy” Cummings, a professor of engineering at George Mason University, who testified as an expert witness. Missy stated that Tesla’s marketing causes real confusion and that even the term "Autopilot" misleads drivers, leading to complacency and a false sense of security.

Missy’s testimony aligns with federal regulators’ findings. In 2023, a major safety investigation resulted in a recall of 2 million Tesla vehicles after it was discovered that the driver-assistance program failed to ensure drivers stayed alert. Meanwhile, Tesla is also expanding its presence with the opening of a retro diner in Los Angeles. The diner, located on Santa Monica Boulevard, combines 1950s aesthetics with Tesla’s tech-driven vibe, featuring a Supercharger station, an outdoor movie setup, and comfort food served in containers shaped like the Cybertruck.

Elon Musk shared a video of the location on X, expressing his vision to establish similar diners in major cities worldwide and at Supercharger sites on long-distance routes. The diner offers a menu with burgers, hot dogs, wings, and hand-spun milkshakes, served in packaging designed to resemble Tesla’s pickup. Visitors can park, plug in, and enjoy a drive-in movie while waiting, with the film’s audio playing through their Tesla car’s built-in sound system.

Despite these developments, the legal battle in Oakland remains a critical focus. The DMV case, officially titled In the Matter of the First Amended Accusation Against: TESLA, INC, 21-02188, will determine whether Tesla retains its right to sell cars in California. While Elon Musk may be serving milkshakes and entertaining customers, the government is seeking accountability for the company’s marketing practices.