Tesla sues California DMV, requesting the revocation of the false advertising ruling against FSD

IT House, February 24 — Tesla is suing the California Department of Motor Vehicles (DMV) to revoke a ruling that found the company violated the law by false advertising its autonomous driving features.

The lawsuit comes two months after the state administrative hearing office determined Tesla engaged in false advertising. The office also stated that the DMV could temporarily revoke the company’s vehicle manufacturing or sales license in the state.

However, the DMV has not taken this action and instead requested Tesla to correct its marketing statements. As of February 17, the agency said Tesla had made the necessary corrections, and there was no need to suspend its license.

Nevertheless, Tesla, which is heavily betting on its future autonomous taxi business, hopes the DMV will make a bigger concession. In a lawsuit filed on February 13, Tesla’s lawyers accused the DMV of “baseless and improper” characterization of Tesla’s previous use of terms like “Autopilot” and “Full Self-Driving” as “misleading advertising.”

Currently, Tesla has renamed some of its automated driving assistance systems to “Full Self-Driving (Supervised)” and offers it only via subscription. In the past, Tesla divided its semi-autonomous driving features into Basic Autopilot, Enhanced Autopilot, and Full Self-Driving, and offered early access or beta versions of new features still under development to some users, with related systems sold as one-time purchases.

The California DMV has not yet commented, and Tesla has not immediately responded to requests for comment.

Tesla CEO Elon Musk has long promised investors and users that the company’s vehicles can be gradually upgraded through remote software updates to eventually become capable of autonomous taxis. Despite increasingly advanced systems, this promise has yet to be fulfilled.

After a decline in electric vehicle sales last year, Tesla’s future success largely depends on launching a true autonomous driving system that can operate safely without human intervention for steering or braking.

Currently, Tesla is conducting limited autonomous taxi pilot tests in Austin, Texas. Last week, the company announced the start of production for its two-seat, steering-wheel- and pedal-free autonomous vehicle, Cybercab, in Texas.

For years, Tesla’s marketing has given the impression that its systems can be used safely without driver attention. For example, in 2018, Musk drove a Model 3 with Autopilot enabled on CBS’s “60 Minutes,” sitting next to reporter Leslie Stahl. He kept both hands off the wheel and told the reporter he was doing “nothing” as the car drove itself.

However, Tesla’s user manual clearly states that drivers must pay constant attention to the road when using the “FSD (Full Self-Driving) (Assist Mode).”

In documents submitted to the California administrative hearing office, DMV lawyers pointed out that Tesla’s marketing of “Autopilot” and “FSD” misleadingly implied the vehicles could achieve full autonomous driving.

Tesla’s lawyers argued that the DMV has never proven that California consumers are confused about whether their vehicles can operate safely without human oversight.

The company’s lawyers stated that during the use of these features, consumers “cannot fail to see clear and repeated warnings that these features do not enable full autonomous driving” when purchasing a Tesla equipped with Autopilot or FSD.

In another class-action lawsuit in California, users who purchased FSD expecting their vehicles to be upgraded to autonomous taxis in the future are seeking refunds.

Tesla has also been held partly responsible for a fatal accident involving its autonomous driving system. During the trial, the involved driver claimed that his phone fell while he was driving, and he bent down to pick it up, believing that the Enhanced Autopilot would automatically brake when encountering obstacles. The case ultimately ordered Tesla to pay $243 million (approximately 1.679 billion RMB at current exchange rates) to the victim’s family and the injured survivors.