California Regulators Allow Tesla Sales to Continue

Tesla avoids 30-day sales suspension after addressing misleading marketing claims.

Published on Feb. 21, 2026

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California regulators have decided not to suspend Tesla's license to sell vehicles in the state, after the electric automaker made changes to address concerns about misleading drivers about the safety and capabilities of its Autopilot and Full Self-Driving features.

Why it matters

This decision allows Tesla to continue selling its vehicles in California, one of the company's largest and most important markets. The regulators' move signals that Tesla has sufficiently addressed issues around deceptive marketing that had previously led to a recommendation to suspend sales.

The details

An administrative law judge had previously recommended that California regulators suspend Tesla's license to sell cars in the state for 30 days, after finding the company had misled drivers about the abilities of its Autopilot and Full Self-Driving features. However, regulators gave Tesla a 90-day window to make changes, and they have now determined the company has done enough to fix the deceptive marketing, including no longer using the term 'Autopilot' and instead using 'supervised' to describe the capabilities of its driver-assistance systems.

  • On Tuesday, February 18, 2026, California regulators announced their decision.
  • In 2025, an administrative law judge had recommended a 30-day suspension of Tesla's sales license.

The players

California Department of Motor Vehicles

The state agency responsible for regulating vehicle sales and marketing 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 its largest U.S. market, but also highlights the ongoing scrutiny the company faces over the marketing and safety claims around its driver-assistance technologies.