Tesla Avoids Sales Suspension in California After Marketing Changes

Elon Musk's company makes revisions to driver-assistance system branding and language to comply with state regulations.

Published on Feb. 22, 2026

Got story updates? Submit your updates here. ›

Tesla has successfully avoided a potential 30-day sales suspension in California by making changes to how it markets its driver-assistance technologies. The California Department of Motor Vehicles announced that Tesla has taken corrective action to address concerns about exaggerating the capabilities of its Autopilot and Full Self-Driving features. As part of the changes, Tesla has discontinued the 'Autopilot' branding and modified its marketing language to better clarify the need for human supervision.

Why it matters

The California case represents just one part of the extensive scrutiny Tesla has faced regarding its driver-assistance technologies. The company has been under investigation by federal prosecutors, securities regulators, and the NHTSA, and has also faced numerous lawsuits from consumers and investors over how its driver-assistance features are marketed, utilized, and perform in real-world conditions.

The details

An administrative judge had previously ruled that Tesla had been exaggerating the capabilities of its driver-assistance systems, putting the company at risk of losing its sales license in California for 30 days. Tesla chose to implement the requested changes to its marketing practices rather than appeal the ruling, allowing it to continue selling cars in the state without interruption.

  • In December 2025, an administrative judge ruled that Tesla had been exaggerating the capabilities of its driver-assistance systems.
  • In February 2026, the California Department of Motor Vehicles announced that Tesla had taken corrective action to address the concerns.

The players

Elon Musk

The CEO and co-founder of Tesla, an American electric vehicle and clean energy company.

California Department of Motor Vehicles

The state agency responsible for regulating the automotive industry in California.

Got photos? Submit your photos here. ›

What’s next

The California case is just one part of the ongoing scrutiny Tesla faces regarding its driver-assistance technologies. The company continues to be under investigation by federal agencies and has also faced numerous lawsuits from consumers and investors.

The takeaway

This case highlights the challenges Tesla faces in marketing its driver-assistance features, as regulators and the public continue to scrutinize the company's claims about the capabilities of its technology. The need for clear and accurate communication around the limitations of these systems is crucial to ensure public safety and trust.