Tesla escapes suspension by California regulator with marketing adjustments

• The California DMV accused Tesla in 2022 of false advertising by using 'autopilot' and 'Full Self-Driving' terms, later narrowing focus to 'autopilot' after Tesla clarified FSD requires driver supervision
• California is Tesla's largest U.S. market, making the threatened suspension particularly significant for the company's operations
• Tesla CEO Elon Musk has shifted company focus toward robotaxis with self-driving technology and humanoid robots amid broader EV demand challenges

Summary: Tesla Avoids California License Suspension After Marketing Changes

Key Development:

Tesla has successfully avoided a 30-day suspension of its dealer and manufacturer licenses in California after discontinuing use of the term "autopilot" in marketing materials within the state, according to the California Department of Motor Vehicles (DMV) announced Tuesday, February 17, 2026.

Background:

The DMV initially accused Tesla in 2022 of misleading advertising through its use of "autopilot" and "Full Self-Driving" (FSD) terminology for advanced driver-assistance features. By December, regulators narrowed their focus specifically to "autopilot" after Tesla clarified that its FSD feature requires driver supervision. The DMV had previously deferred the suspension order, allowing Tesla additional time to address the violations.

Market Context:

This reprieve comes as Tesla and the broader EV sector face significant headwinds from plummeting demand following the expiration of key federal tax credits that previously stimulated sales. California represents Tesla's largest U.S. market, making the potential suspension particularly consequential.

Strategic Shift:

CEO Elon Musk has pivoted the company's focus toward robotaxis equipped with self-driving technology and humanoid robots, moving away from traditional consumer EV sales.

Product Clarification:

• "Autopilot" enables highway functions including acceleration, braking, and lane-keeping
• "Full Self-Driving" allows lane changes and traffic signal response on city streets, though driver supervision remains mandatory

Implications:

The resolution allows Tesla to maintain operations in its critical California market without disruption, though the marketing restrictions may impact how the company positions its advanced driver-assistance technologies going forward.