This week, a California administrative law judge sided with the state’s Department of Motor Vehicles in a dispute over how Tesla markets its driver assistance software, finding that the company’s use of terms like “Full Self-Driving” and “Autopilot” can mislead consumers about what the systems are actually capable of doing.

The ruling does not prohibit Tesla from selling vehicles, disable any existing software features, or make a determination about the technical quality of Tesla’s autonomy stack. Instead, it focuses narrowly on marketing language, and whether that language creates expectations the technology does not meet.

Tesla has been given 60 days to revise its marketing materials. Only if it fails to comply would the DMV consider penalties recommended by the judge, including a temporary suspension of Tesla’s California sales license.

The Ruling is about Tesla’s Marketing and Not About it’s Tech

Tesla can still continue selling cars in California. Its existing driver assistance systems remain legal. Nothing in the ruling declares the software unsafe or noncompliant.

What changed is the state’s tolerance for how those systems are described to consumers.

According to public reporting, the judge agreed with the DMV that Tesla’s marketing is misleading under state consumer protection law when it uses language that implies full autonomy for systems that require continuous driver supervision.

Tesla’s Autopilot and Full Self-Driving features remain classified as SAE Level 2 driver assistance systems. That classification means the human driver is responsible for monitoring the road and intervening at all times, regardless of how capable the system may appear in demonstrations.

The DMV has paused enforcement actions while Tesla is given time to bring its marketing into compliance.

What the Order Says, and What It Does Not

The full administrative decision has not yet been publicly released by the California DMV or the Office of Administrative Hearings. As a result, coverage relies on summaries and statements attributed to regulators and Tesla.

According to reporting, the DMV’s position is that Tesla must either stop using autonomy oriented terms like “Autopilot” or substantiate that its vehicles can operate without human oversight, something Tesla does not claim its current systems can do.

Tesla has disputed the characterization. In a public response, the company described the action as a consumer protection order focused on terminology, noting that no specific customer complaints triggered the case.

This is not a dispute over FSD’s effectiveness, accident rates or system performance. It is about how an ordinary consumer interprets Tesla’s branding.

Tesla’s Terminology Creates High Expectations

Tesla’s software can navigate city streets, handle highway driving, and perform complex maneuvers in certain conditions. But it still depends on a human driver to supervise, intervene, and take responsibility. From a regulatory standpoint, that places it alongside advanced cruise control systems offered by other automakers, regardless of how frequently Tesla’s system can complete trips without intervention.

The judge’s concern, as reflected in public summaries, is that terms like “Full Self-Driving” suggest a level of autonomy that exceeds those boundaries, even if disclaimers exist elsewhere in the user interface or documentation.

From a regulatory perspective, this matters because expectations shape behavior. Overestimating system capability increases the risk of misuse, even if the software performs as designed.

Notably, regulators avoided evaluating Tesla’s autonomy roadmap, neural network architecture, or long-term robotaxi ambitions.

Is There a Political Dimension?

It is also hard to separate this decision from the broader political context in California. Elon Musk has increasingly positioned himself outside, and often in opposition to, the Democratic coalition that governs the state, while California regulators have become less willing to grant Tesla the informal latitude it once enjoyed as a clean energy standard bearer. That does not mean this ruling is political retaliation. The case has been moving for years and is narrowly focused on consumer protection. But it does suggest that Tesla is now being treated less as an exceptional innovator and more like a conventional automaker, subject to the same plain language standards as everyone else.

What This All Means

For Tesla, terms like “Full Self-Driving” and “Autopilot” may be helpful for narrative and valuation, but they also raise the bar with regulators. As Tesla continues pushing toward higher levels of autonomy, it becomes increasingly important that its marketing does not get ahead of what the system can reliably deliver. When that gap opens, it creates an opportunity for competitors to position themselves as the more cautious and credible alternative in the eyes of regulators.

That matters because regulatory framing can shape the economics of autonomy. Safety requirements are not neutral. Mandating additional sensors, redundancy, or hardware can quickly raise capital costs and slow payback periods. A company that persuades regulators that its approach is inherently safer can, intentionally or not, influence what is considered the baseline for everyone else.

Tesla should thus be careful. It is not always going to have a friend in the White House. It needs either achieve full autonomy or work with the regulators to get its marketing completely spot on.