Latest / Elon Musk Podcast / California DMV vs. Tesla The 60-Day Countdown Has Started

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California DMV vs. Tesla The 60-Day Countdown Has Started · Elon Musk Podcast

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  tremendously. Thank you so much.
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  A California administrative law judge just ruled that Tesla
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  engage in deceptive marketing for Autopilot and Full Self
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  Driving. Now the ruling came down
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  yesterday and the judge agreed with the state DMV's request to
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  suspend Tesla sales and manufacturing licenses for 30
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  days as a penalty. Now the DMV has stayed the order
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  and is giving Tesla 60 days to fix its marketing or face the
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  suspension. Tesla's response was immediate.
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  The company posted on X that sales in California will
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  continue uninterrupted. So what does that even mean?
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  What happens when the state's largest automaker refuses to
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  comply with a court ruling that says its product names are
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  misleading? The case has been winding
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  through California's Office of Administrative Hearings for
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  years. The DMV accused Tesla of making
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  customers believe that Autopilot and Full Self Driving were
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  capable of high levels of autonomy, which contributed to
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  overconfidence, crashes and even deaths.
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  Now, we're going to cover what the judge actually found, but
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  Tesla has to do to avoid suspension.
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  And while the company says it will not comply and what this
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  means for AI and autonomous vehicle markets in the future,
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  and we'll go right into that right after this short break.
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  You know, the California DMV filed accusations against
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  Tesla's manufacturing and dealer licenses back in November of
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  2023. And the company pointed to
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  written marketing materials primarily on Tesla's website.
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  They used the terms autopilot and full self driving
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  capability. One phrase that drew particular
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  attention was this. The system is designed to be
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  able to conduct short and long distance trips with no action
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  required by the person in the driver's seat.
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  That statement was on Tesla's website.
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  The problem is that vehicles equipped with those features
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  could not operate as autonomous vehicles when that statement was
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  published, and they still cannot fully now.
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  Here's the key point to all of this.
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  So the judge found that the name Autopilot follows what the
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  ruling called a long but unlawful tradition of
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  intentionally using ambiguity to mislead consumers while
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  maintaining deniability. A reasonable person could
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  believe that a car on Autopilot does not require their constant
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  attention. That is incorrect.
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  The driver is still fully responsible for the vehicle at
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  all times. Now, on full self driving, the
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  court was much harsher. The judge found that this
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  feature name is, in the court's words, actually unambiguously
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  false and counterfactual. Tesla tried to argue that no
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  reasonable person could believe Full Self driving actually means
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  full Self Driving, and then the court rejected that argument.
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  Tesla has since added the word supervised to the name of its
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  Full Self Driving software and now reads Full Self Driving and
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  then supervised and Tesla's marketing materials.
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  The DOV acknowledged that change, but said it does not go
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  far enough now. Tesla's response was very
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  defiant. The company issued a statement
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  through a public relations firm saying this was a consumer
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  protection order about the use of the term Autopilot in a case
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  where not one single customer came forward to say there was a
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  problem and the judge addresses it directly.
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  Though the DMV is authority to regulate vehicle advertising
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  does not depend on evidence that any particular ad actually
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  deceived or harm any person, the agency is permitted to act
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  affirmatively to prevent deceptive advertising actually
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  before any harm occurs. Now, the judge also anticipated
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  Tesla's likely non compliance. She wrote that without the
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  incentive of suspension, Tesla offers no reason for the DMV to
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  expect they will alter the Autopilot name or stop
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  misrepresenting his vehicle's driver assistance functions to
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  the public. Now, Suspension of Tesla's
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  licenses is a reasonable remedy now.
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  The DMV's original decision included a 30 day suspension of
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  both Tesla's sales license and its manufacturing licenses.
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  Now the agency softened that a little bit.
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  It permanently stayed the manufacturing suspension to
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  avoid disrupting operations at Tesla's Fremont factory, which
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  builds hundreds of thousands of cars per year, including all
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  North American Model 3 sedans. Now the sales license suspension
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  is what remains on the table. California's Tesla's largest
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  market in the USA, 30 day shutdown of sales would have a
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  significant impact on the company's quarterly numbers.
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  Tesla knows this. The DMV knows this.
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  The leverage is part of why the agency gave Tesla 60 days to
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  comply rather than enforcing the suspension immediately.
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  And Tesla has two options. It can change its marketing to
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  remove the term Autopilot or make it software actually
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  capable of autonomous driving. The first option is a branding
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  concession that Tesla has resisted for almost a decade.
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  Second option does not exist yet.
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  Tesla's vehicles are classified as Level 2 driver assist
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  systems, which means a human must remain engaged and ready to
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  take over at all times. And this ruling lands at the
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  same moment that Tesla is advancing its robotaxi test in
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  Austin. The company removed safety
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  monitors from some of their cars over the weekend from its small
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  fleet in the city. It had been offering rides to
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  customers with a safety monitor either in the driver's seat or
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  the passenger seat. Now those vehicles are operating
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  without a human backup. Tesla says the Austin robo taxis
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  are running a different version of the driving software than
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  what customers have in their cars.
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  That distinction matters legally, but it also shows how
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  Tesla is pushing forward on autonomy claims while
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  simultaneously fighting a ruling that says its current claims are
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  misleading. Now, Tesla has faced multiple
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  investigations over similar allegations.
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  The California Attorney General, Department of Justice, and the
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  Securities and Exchange Commission have all looked into
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  whether Tesla's marketing around partial autonomy systems was
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  misleading. The company has also settled
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  several personal civil lawsuits over crashes involving
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  Autopilot. This ruling is the first major
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  state level decision that could force Tesla to change how it
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  describes its products. Now, DMV Director Steve Gordon
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  said in a statement that the decision confirms the department
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  will hold every vehicle manufacturer to the highest
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  safety standards. He added that Tesla can take
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  simple steps to pause the decision and permanently resolve
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  the issue. These steps, according to
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  Gordon, are ones that autonomous vehicle companies and other
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  automakers have already achieved in California's marketplace.
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  Now, Tesla has 60 days to comply.
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  If it doesn't, the DMV will suspend its dealer license for
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  30 days. Tesla says sales will continue
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  uninterrupted, and the state says otherwise.
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  Now we're going to find out in two months which statement holds
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  true. Hey, thank you so much for
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  listening today. I really do appreciate your
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  please take care of yourselves and each other and I'll see you
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  tomorrow.