Tesla sues California agency over FSD false advertising ruling

Tesla has filed a lawsuit against the California Department of Motor Vehicles (DMV). The automaker wants to challenge a ruling that accuses the company of false advertising regarding the “Autopilot” and “Full-Self-Driving” (FSD) assistance systems. According to court documents filed with the Superior Court of California, Tesla feels it is being unfairly and baselessly portrayed as a fraud (Case No. 26STCP00629).

In December 2025, the US state's Office of Administrative Hearings ruled that Tesla had violated California law with its product names. The authority argued that the terms “autopilot” and “full self-driving” falsely suggested that the vehicles could drive autonomously. In reality, however, these are SAE Level 2 assistance systems that require constant attention and intervention from the driver.

Following the ruling, the DMV could have temporarily revoked Tesla's licenses to manufacture or sell vehicles. Instead, the authority demanded that Tesla adjust its marketing language. The company made the required changes by February 17, 2026, making a license revocation unnecessary.

New Name and Subscription Model Only

Tesla now markets its driver assistance system under the name “Full Self-Driving (Supervised)” and offers it exclusively as a monthly subscription for $99. Previously, customers could choose between different packages, including Standard Autopilot, Enhanced Autopilot, and Full Self-Driving with a one-time payment and beta access. Tesla still sells its vehicles in Europe under this model. The addition of “supervised” is now intended to make it clearer that active driver monitoring is necessary.

In its lawsuit, Tesla argues that the DMV has not presented any evidence of actual confusion among California consumers. The company points out that both in marketing materials and in the manuals, it is clearly and repeatedly stated that the systems are not autonomous and require constant supervision. It is impossible to purchase or use the features without encountering these warnings.

Several Legal Disputes

The legal dispute with the DMV is not Tesla's only legal battle concerning driver assistance. A class-action lawsuit is running in parallel in California, in which customers are demanding refunds for FSD. Furthermore, Tesla was partially held liable in one case for a fatal accident with Enhanced Autopilot activated; the judgment amounted to $243 million.

(mki)