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Tesla Sues California DMV over Autopilot and FSD Advertising Ruling

Tesla challenges California DMV's false advertising ruling over Autopilot, disputing claims of consumer confusion and protecting its robotaxi business plans.

  • Yesterday, Tesla sued California Department of Motor Vehicles to overturn a ruling that it violated state law by overstating its cars' self-driving capabilities, asking courts to remove the agency's conclusion.
  • The December 2025 ruling found the Office of Administrative Hearings that the name `Full Self-Driving` is 'actually, unambiguously false and counterfactual,' following a five-day hearing in 2025 and a 2021 investigation.
  • Tesla rebranded and changed its sales model, discontinuing Autopilot and renaming Full Self-Driving as Full Self-Driving with a $99 per month subscription, while regulators gave a 60-day compliance window and 30-day potential license suspension.
  • The ruling threatens Tesla's robotaxi narrative by formally finding false advertising, which undermines its business case and adds liability after a federal judge upheld a $243 million verdict last week.
  • Despite complying with corrective steps, Tesla is suing to remove the `false advertiser` label while expanding Robotaxi pilot in Austin and starting Cybercab production last week.
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CNBC broke the news in United States on Monday, February 23, 2026.
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