Tesla is currently embroiled in a legal battle with California’s Department of Motor Vehicles (DMV) over allegations that the electric vehicle maker misled consumers with exaggerated claims about the capabilities of its driver-assistance software. The lawsuit, filed on February 13, aims to overturn a state ruling that labeled Tesla as a “false advertiser.”
The dispute stems from a decision made by the state’s Office of Administrative Hearings in December 2025, which found that Tesla’s use of terms like “Autopilot” and “Full Self-Driving” violated California law. Despite initially facing the threat of having its manufacturing and sales licenses suspended, Tesla was allowed to continue operations after agreeing to update its marketing language.
Tesla’s legal team contends that the DMV unfairly branded the company as a false advertiser. They argue that customers were clearly informed that features like Autopilot and Full Self-Driving (FSD) do not make the vehicle fully autonomous. In response, Tesla has rebranded its advanced features as “Full Self-Driving (Supervised)” to emphasize the need for human attentiveness.
The timing of the lawsuit is crucial for Tesla as it moves forward with its robotaxi pilot program in Austin, Texas, and introduces the first production unit of its Cybercab at Gigafactory Texas. The company’s future valuation hinges on the promise of unsupervised autonomy, but legal challenges like the recent $243 million verdict in a Florida case pose significant obstacles.
While Tesla pushes to clear its name in California, it also faces a class-action lawsuit from owners who feel they were sold on a “robotaxi” concept that has yet to materialize. The California DMV has not commented on the new lawsuit, but state lawyers have previously criticized Tesla’s marketing for inaccurately suggesting a level of autonomy that was both technologically and legally misleading.
As Tesla navigates these legal challenges, it continues to innovate and push the boundaries of autonomous driving technology. The outcome of this legal battle will undoubtedly shape the future of Tesla’s branding and the public perception of its advanced driver-assistance systems.