A California judge ruled against Tesla in December 2025, saying the company’s ads mislead customers about what its driving systems can do. The court found that Tesla’s marketing terms “Autopilot” and “Full Self-Driving” don’t accurately describe the company’s technology. Tesla’s systems are actually Level 2 driving assistance features that still need a human driver to pay attention and stay ready to take control at any time.
A California judge ruled Tesla’s “Autopilot” and “Full Self-Driving” ads mislead customers about what Level 2 driving assistance actually does.
The judge reviewed the case after a five-day hearing in July 2025. Tesla’s marketing materials claimed the systems could “conduct short and long-distance trips with no action required by the person in the driver’s seat.” This statement isn’t true, according to the court. The technology can’t drive itself without human supervision, yet Tesla’s ads suggested otherwise.
California’s Department of Motor Vehicles will enforce this ruling. The DMV gave Tesla between 60 and 90 days to fix its misleading marketing materials. If Tesla doesn’t comply, the DMV can suspend the company’s dealer licenses for up to 30 days. The agency focused on suspending dealer licenses rather than shutting down Tesla’s manufacturing operations. Prior Miami jury ruled Tesla partly responsible for a fatal crash involving autopilot, resulting in a $240 million award to crash victims.
Tesla operates its largest factory in Fremont, California, where it makes about 500,000 vehicles yearly. The facility employs roughly 20,000 workers. A 30-day suspension would seriously hurt Tesla’s production and sales. During court proceedings, Tesla called the proposed penalty “draconian.”
The ruling also affects a class action lawsuit. A federal judge certified a class that includes California residents who bought or leased Tesla vehicles with the Full Self-Driving package between May 2017 and July 2024. The federal court found that autonomous capability claims can be answered using the same evidence for all customers. However, the court decided that money paybacks weren’t appropriate since there wasn’t clear financial harm that could be calculated.
The case centers on whether Tesla’s advertising violates California’s rules against false vehicle marketing. The court concluded there’s no reason to believe Tesla would stop the misleading ads without legal pressure.