The California Department of Motor Vehicles (DMV) has announced its decision in its investigation into electric vehicle manufacturer Tesla’s driver assistance systems. According to the ruling, approved by an administrative judge, the company’s marketing language for its “Autopilot” and “Full Self-Driving” software was found to be misleading and therefore violated regulations.

Will Tesla sales be halted in California?

The court, ruling that the software’s capabilities were exaggerated, approved a 30-day suspension of Tesla’s vehicle sales in California and a temporary suspension of its production license.

The DMV’s official statement indicated that the sanctions would not be implemented immediately and that the company was given a 60-day compliance period. During this time, Tesla must change or completely remove the misleading advertising language.

If the company makes the required changes, it has the option of having the sales ban and license suspension completely lifted. However, failure to meet the specified conditions risks disrupting production at the Fremont factory, which is critical to the North American market, and sales throughout the state.

Following the decision, Tesla announced on social media that sales operations in California would continue uninterrupted. Company management maintains that the issue is solely a consumer protection lawsuit concerning the technical definitions of the terms used, and that no official customer complaints have been received on this matter to date.

Conversely, numerous individual lawsuits and ongoing legal proceedings related to traffic accidents involving Autopilot technology support claims that the marketing language creates overtrust in the systems among drivers.

California is strategically important as it is Tesla’s largest market share region in the United States. A potential sales ban or production halt could directly impact the company’s annual delivery targets and market value.

Negotiations with the DMV and updates to advertising materials over the next two months will determine the fate of the legal action. The company also reserves the right to appeal the decision at the end of the process.