Tesla’s legal fight with California DMV continues over Autopilot and self-driving claims

Tesla has launched a new legal challenge against the California Department of Motor Vehicles, filing a lawsuit seeking to overturn a state agency ruling related to the company’s marketing of its driver-assistance technology. The California DMV determined that Tesla’s advertising and promotional language misled consumers by exaggerating what its vehicles could actually do in automated driving, and concluded that this violated state law.

The lawsuit revives a dispute that seemed, at least on the surface, to have cooled down just last week. At that time, the DMV indicated it would not proceed with suspending Tesla’s sales and manufacturing licenses for 30 days. The reason was that Tesla complied with the agency’s order and stopped using the term “Autopilot” in its marketing materials within California. CNBC first reported Tesla’s lawsuit.

The state regulator had the authority to punish Tesla more aggressively, but ultimately chose not to. An administrative law judge had agreed with the DMV’s push to suspend Tesla’s licenses for 30 days as a penalty for the deceptive marketing finding. Even so, rather than yanking the company’s ability to sell and manufacture vehicles in the state for that period, the DMV gave Tesla a compliance window and required the automaker to make changes within 60 days.

Tesla complied — but it did so in a particularly sweeping way. The company didn’t merely remove the word “Autopilot” from California-specific promotional materials. In January, Tesla went even further by discontinuing Autopilot entirely in the United States and Canada. That unusually drastic step now raises questions about Tesla’s strategy, including whether the company later came to regret eliminating the feature and is now seeking a legal path to restore Autopilot or defend its previous branding approach.