A California Administrative Law Judge has ruled that Tesla’s marketing around its Autopilot and full self-driving systems has been deceptive. As a result, the company may face punitive measures against its operations in the state.
30-Day Suspension of Sales and Manufacturing
The California Department of Motor Vehicles has announced that a court has recommended suspending Tesla’s license to sell and manufacture vehicles in the state for 30 days. This decision was made by Judge Juliet Cox, who found that Tesla’s branding of its driver assistance technologies as “Full Self-Driving” and “Autopilot” was misleading.
The company’s website describes its FSD driver assistance system as being “designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.” However, during the hearings, Attorney Matthew Benedetto, a member of Tesla’s legal team, stated that “Cars with Full Self-Driving capabilities are currently not capable of driving themselves.”
Proposed Decision and Next Steps
The proposed decision was sent to the DMV for consideration, but it will not be released to the public until December 22. The DMV has decided not to pursue the suspension of Tesla’s license to manufacture and has imposed a 90-day stay on the suspension of its license to sell. This will give the company time to amend its marketing practices and rebrand the term “Autopilot” across its marketing materials.
Tesla Shares Reach New Record High
Despite this regulatory headwind, Tesla shares soared 3.07% to a new record high, closing at $489.88 per share. The company’s autonomous driving features are a major factor in its success, with CEO Elon Musk confirming that Tesla has begun testing its robotaxis in Austin without a human “safety monitor” in the passenger seat.
Market Analysis
Tesla shares have scored high on momentum and quality, with a favorable price trend in the short, medium, and long terms. The company’s stock is expected to continue performing well, driven by its innovative technologies and expanding market presence.
Conclusion
The California Administrative Law Judge’s decision to suspend Tesla’s manufacturing and sales license is a significant development in the company’s history. While the suspension is currently on hold, it highlights the need for Tesla to re-evaluate its marketing practices and ensure that its advertising is accurate and transparent. As the company continues to innovate and expand its presence in the market, it is likely to face ongoing scrutiny and challenges from regulators and competitors alike.