Tesla avoids 30-day California suspension after removing Autopilot branding

The California Department of Motor Vehicles has decided not to suspend Tesla’s sales and manufacturing licenses after the electric vehicle maker ceased using the term “Autopilot” in its marketing materials within the state. The decision, announced late Tuesday, allows Tesla to continue operations in California without interruption and formally closes a regulatory dispute that began nearly three years ago.

California represents Tesla’s largest market in the United States, making the DMV’s ruling particularly significant for the company’s business operations. According to the DMV’s statement, Tesla took corrective action to avoid the 30-day license suspension that had been recommended by an administrative law judge in December.

Background of the Autopilot Marketing Dispute

In November 2023, the California DMV filed accusations against Tesla for allegedly violating state law through deceptive marketing practices. The regulator argued that terms like “Autopilot” and “Full Self-Driving” misled customers about the actual capabilities of Tesla’s advanced driver assistance systems.

Tesla initially responded by modifying the term “Full Self-Driving Capability” to “Full Self-Driving (Supervised)” to clarify that drivers must remain attentive. However, the company continued using the Autopilot designation, which prompted the DMV to escalate the case to an administrative law judge at the California Office of Administrative Hearings.

Regulatory Action and Tesla’s Response

The administrative law judge sided with the DMV in December and recommended a 30-day suspension of Tesla’s dealer and manufacturer licenses in California. Rather than immediately implementing the suspension, the state regulator granted Tesla 60 days to comply with the directive.

According to the DMV’s release, Tesla has now stopped using the misleading term “Autopilot” in marketing its electric vehicles in California. The agency noted that this action, combined with the previous modification to the Full Self-Driving terminology, satisfied the requirements to avoid the license suspension.

Strategic Shift Beyond Autopilot

Tesla went beyond simply removing the term from its California marketing materials. In January, the company discontinued Autopilot entirely in the United States and Canada, effectively eliminating the basic advanced driver assistance system from its product lineup.

Additionally, this move serves a dual purpose for Tesla. While it ensures compliance with California DMV requirements, it also appears designed to increase adoption of the company’s Full Self-Driving (Supervised) system, which requires customers to purchase an upgrade unlike the previously included Autopilot feature.

Changes to FSD Pricing Structure

Meanwhile, Tesla has restructured how customers access its Full Self-Driving technology. The system previously required an $8,000 one-time payment until February 14, but is now exclusively available through a monthly subscription model priced at $99.

In contrast to the fixed pricing structure, Tesla CEO Elon Musk has indicated that the subscription fee will likely increase as the system’s capabilities improve. This shift to subscription-only pricing represents a significant change in Tesla’s business model for advanced driver assistance features.

The resolution of this case provides regulatory clarity for Tesla’s operations in California, though the company faces ongoing scrutiny regarding its driver assistance technology claims in other jurisdictions. The outcome demonstrates how state regulators continue monitoring automotive marketing practices, particularly concerning autonomous driving terminology that may influence consumer expectations.