A recent lawsuit filed by the California Department of Motor Vehicles (DMV) against the electric vehicle manufacturer poses a serious threat to Tesla’s right to continue manufacturing and selling vehicles in California, accusing the company of misleading consumers through false advertising about its full self-driving (FSD) technology.
A decision made following a week-long court hearing may result in the possible suspension of Tesla’s license to operate in the state for a minimum period of 30 days, which could significantly impact the business’s bottom line and its reputation in society. The claims of the DMV primarily focus on the Tesla branding and marketing of the advanced driver assistance system as Full Self-Driving without specifying that it does not allow autonomous driving and must be operated by the driver.
The Case at a Glance
The dispute started from a complaint filed by the California DMV with the authorities in 2021, and it has finally reached its decisive stage. The DMV says the marketing of Tesla falsely portrays its FSD software to customers, to get them to understand that the apparatus can drive fully autonomously.
According to the DMV in the filing, a reasonable consumer will be misled by the terminology (Full Self Driving) used by Tesla, as well as associated marketing materials. The agency aims at penalties that may presuppose a suspension and even a license withdrawal to sell and manufacture vehicles in California.
California is an important state to Tesla in that it houses its original factory at Fremont and a rich market, especially among Tesla consumers. A 30-day shutdown may derail the supply of vehicles, affect the quarterly profits, and sour the relationships with its customers.
Tesla’s Silence and PR Strategy
Tesla has also not been vocal despite the escalation of the controversy. In 2020, the company became a global outlier when it was ordered by CEO Elon Musk to get rid of its public relations and communications department completely, a move that left the press and the general population with very little official source of information in times of crisis.
Musk is not only present on X, but he combines topics such as personal opinions, memes, and product announcements in the same tweet, which is limited in time, structured in terms of formal legal or regulatory challenges. So far, both Musk and Tesla have made no official announcement regarding the possible suspension and the DMV maximums.
What’s at Stake for Tesla
In addition to the direct consequences that the case poses to the existence of Tesla in California, it has more significant implications for the future of self-driving vehicles and how they will be regulated. The driver assistance systems of Tesla have been drawing more scrutiny from the federal and state authorities. The National Highway Traffic Safety Administration (NHTSA) is conducting numerous investigations into crashes involving Autopilot and FSD.
An unfavorable decision on Tesla might open the path to more strict advertising legislation regarding autonomous vehicle technology and would compel the corporation to either change the name of its FSD package or modify the list of features. The DMV is also taking restitution of the drivers in California who might have been misled into buying the FSD option, which presently costs $12,000.
