Tesla has filed a lawsuit against the California Department of Motor Vehicles (DMV), fighting back against a ruling that found the company guilty of false advertising for the way it marketed its “Autopilot” and “Full Self-Driving” features.
According to the Los Angeles Times, California regulators argued that Tesla misled consumers by using those names for driver-assistance systems that still require a fully alert human behind the wheel at all times. An administrative judge sided with the DMV late last year, finding that Tesla’s marketing implied its cars could drive themselves — something they cannot safely do without human supervision.
Following the ruling, the DMV threatened to suspend Tesla’s vehicle sales in California — the country’s largest car market — for 30 days if the company did not fix its advertising within 90 days. Tesla responded by dropping the “Autopilot” name from its marketing materials and rebranding the feature as “Traffic Aware Cruise Control.” The company also began consistently applying the label “Full Self-Driving (Supervised)” to its more advanced driver-assistance mode, a change that Kelley Blue Book notes had actually been introduced more than two years earlier but was used inconsistently.
Those changes were enough for the DMV to hold off on the suspension. But Tesla did not stop there.
In a court filing dated February 13, Tesla’s lawyers argued that the original DMV ruling was “factually wrong” and “legally flawed,” and that the agency had “wrongfully and baselessly” labeled the company a false advertiser. Tesla contends that customers were never misled. “It was impossible to buy a Tesla equipped with either Autopilot or Full Self-Driving Capability, or to use any of their associated features, without seeing clear and repeated statements that they do not make the vehicle autonomous,” the company wrote in the filing.
Tesla’s legal team also pointed out that the DMV presented no consumer witnesses during the original proceedings and instead “relied almost entirely on the testimony of a single law professor” to make its case. The company is now asking a court to reverse the DMV’s order and restore its right to use the “Autopilot” and “Full Self-Driving Capability” names in marketing.
The dispute is unfolding at a critical moment for Tesla. Elon Musk has staked the company’s future on autonomous driving technology and artificial intelligence, but the road has been bumpy. Tesla’s robotaxi service launched in Austin, Texas, last summer and quickly drew scrutiny after witnesses reported the vehicles making dangerous driving decisions. More recently, reports via Yahoo Finance noted five additional robotaxi crashes in Austin during January 2026 alone.
Tesla’s driver-assistance systems have also come under broader scrutiny. Data reported to the National Highway Traffic Safety Administration (NHTSA) show that, as of January 15, Tesla’s Advanced Driver Assistance Systems (ADAS) have been involved in more than 2,800 crashes — far more than any other automaker. General Motors, in second place, had just 108 reported crashes.
Despite those concerns, Tesla’s Supervised Full Self-Driving system has now logged more than 8.2 billion miles of driving. The company faces stiff competition from Waymo, the Alphabet-owned robotaxi service operating fully driverless vehicles in 10 cities, and Zoox, an Amazon-backed autonomous vehicle effort.
Tesla did not respond to a request for comment. Its shares closed at $417.33 on Wednesday, up nearly 2% for the day, and are up 37% over the past year.
The lawsuit is ongoing, and no court date has been announced.
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