Court Rules Tesla Ad About Autopilot Feature Misleads Consumers

CALIFORNIA - A California court has ruled that Tesla has been found to have engaged in deceptive marketing regarding its Full Self Driving (FSD) or autopilot driver assistance system. The ruling opens the door for the California Department of Motor Vehicles (DMV) to suspend Tesla's license to sell and produce vehicles in the state for 30 days.

However, DMV stated that it would give Tesla 60 days to adjust marketing materials and comply with applicable provisions before the sanctions were carried out. This means that the suspension of the permit has not come into effect immediately, as reported by Electrek, Thursday, December 18.

This ruling is an important chapter in a case that has been rolling for years. Since 2016, Tesla has sold level 2 driver assistance software with the name "Full Self-Driving", although the system does not and still does not make vehicles capable of driving completely without human intervention.

The naming was considered to have caused public confusion, especially as Tesla repeatedly mentioned the target of full autonomy that has not been achieved. In addition to FSD, Tesla also uses the term "Autopilot" for other driving assistance features.

The company argued that the term refers to a system of aircraft that still requires a pilot. However, the court considered that the use of the term was deliberately taking advantage of ambiguities that could potentially mislead consumers.

The DMV's official investigation began in 2021 to assess Tesla's marketing claims. The authority found a discrepancy between the company's public messages and the explanations provided to regulators. In 2022, the DMV sent a formal question regarding the alleged creation of a false perception of the vehicle's autonomous capabilities.

Tesla's answer was deemed unconvincing, so the case continued to court. At the same time, the California legislature passed a rule prohibiting automotive manufacturers from exaggerating the autonomous capabilities of vehicles.

In its ruling, the court stated that Tesla's marketing claims were inaccurate. The term "Autopilot" was not considered absolutely wrong, but was considered to follow an old practice of using ambiguity to mislead consumers.

The judge assessed that it was reasonable for people to think that the car did not require the driver's full attention, even though the responsibility still lay entirely with the human behind the wheel. Meanwhile, the label "Full Self-Driving" is considered more problematic.

The court said it was clearly wrong and contrary to the facts. Other claims Tesla made, such as statements that the system was designed to travel short and long distances without driver action and the narrative that only legal reasons that prevent full autonomy are considered to use misleading present tense, not just a promise of the future.

The court also noted that Tesla had changed the term several times, from Full Self-Driving Capability to Full Self-Driving (Supervised) to emphasize the driver's supervision obligation. However, the judge considered it was not excessive if Tesla was asked again to clarify marketing so that the public understood that their vehicles were not autonomous cars.

As a recovery measure, the court stated that the DMV was authorized to suspend or revoke Tesla's license for 30 days if the company did not comply. Tesla called the option too harsh, given that the Fremont, California, plant still produces about half a million units per year and employs around 20,000 people.

However, the judge considered that without the threat of sanctions, there was no guarantee that Tesla would stop making misleading statements. The court rejected the option of financial restitution because it was not proven that there was a clearly measurable loss.

For now, Tesla can still operate in California, which is its largest market in the United States because the DMV will focus on adjusting dealer permits and giving a deadline of 60 days. Concretely, Tesla is asked to stop using the term Autopilot for level 2 systems as well as changing all marketing materials that imply autonomous capabilities.

Meanwhile, Tesla said sales in California would continue without interruption, but the changes the company made in the next 60 days would be decisive.

The ruling adds to Tesla's list of legal challenges, particularly related to FSD, and could potentially strengthen a class action lawsuit accusing the company of misleading consumers about its self-driving capabilities.