Tesla Avoids License Suspension in California Following Autopilot Branding Removal

The California Department of Motor Vehicles (DMV) has decided not to proceed with a 30-day suspension of Tesla's sales and manufacturing licenses after the electric vehicle manufacturer discontinued the use of the term "Autopilot" in its marketing materials within the state. This decision allows Tesla to maintain uninterrupted operations in California, its largest U.S. market, and formally concludes a regulatory dispute that has persisted for nearly three years.

In November 2023, the DMV filed formal accusations against Tesla, alleging violations of state law through deceptive marketing practices related to its advanced driver assistance systems (ADAS). The regulatory body contended that the terminology used for both "Autopilot" — Tesla's standard ADAS — and "Full Self-Driving" (FSD) — its more advanced driver assistance software — misrepresented the systems' actual capabilities and misled consumers.

Tesla initially addressed these concerns by replacing the term "Full Self-Driving Capability" with "Full Self-Driving (Supervised)" to more accurately reflect the system's requirements for continuous driver monitoring. However, the company maintained the "Autopilot" designation, prompting the DMV to escalate the matter to an administrative law judge at the California Office of Administrative Hearings.

In December, the administrative law judge ruled in favor of the DMV's request for a 30-day license suspension as a penalty. Rather than immediately enforcing the suspension, the DMV granted Tesla a 60-day compliance period. According to the DMV's official statement, "Tesla took corrective action and has stopped using the misleading term 'Autopilot' in the marketing of its electric vehicles in California."

The company's response extended beyond California's requirements. In January, Tesla completely discontinued the Autopilot product across the United States and Canada. This strategic decision not only ensured regulatory compliance but also positioned the company to accelerate adoption of its FSD system, which, unlike the previously bundled Autopilot, requires customers to purchase an upgrade.

Tesla has restructured its FSD pricing model significantly. The system, previously available for an $8,000 one-time payment until February 14, is now exclusively offered through a $99 monthly subscription. Tesla CEO Elon Musk has indicated that this subscription fee is expected to increase as the system's capabilities continue to advance.

Key developments:

• Tesla eliminated "Autopilot" terminology from California marketing materials

• The company discontinued Autopilot entirely in the U.S. and Canada in January

• FSD (Supervised) transitioned from a one-time $8,000 purchase to a $99/month subscription model

• California DMV concluded a three-year regulatory investigation without imposing penalties