California Regulators Allow Tesla to Continue Selling in State

DMV decides not to suspend Tesla's license after finding it misled drivers about self-driving capabilities

Published on Feb. 20, 2026

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The California Department of Motor Vehicles has decided not to suspend Tesla's license to sell vehicles in the state for 30 days, after finding that the electric vehicle maker had stopped misleading drivers about the safety and self-driving capabilities of its cars.

Why it matters

This decision by California regulators is significant as it allows Tesla to continue operating in one of its largest markets, avoiding potential disruption to its sales. The case highlights ongoing scrutiny over Tesla's marketing claims around autonomous driving features.

The details

An administrative law judge had previously found that Tesla misled drivers about the abilities of its 'Autopilot' and 'Full Self-Driving' features. However, the DMV has now determined that Tesla has stopped making those misleading claims, leading to the decision not to suspend the company's license.

  • The administrative law judge's finding was made last year.

The players

California Department of Motor Vehicles

The state agency responsible for regulating vehicle sales and operations in California.

Tesla

The electric vehicle manufacturer founded by Elon Musk.

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The takeaway

This decision allows Tesla to continue operating in California, one of its most important markets, without disruption. However, it also highlights the ongoing scrutiny the company faces over its marketing claims around autonomous driving capabilities.