The California Department of Motor Vehicles (DMV) recently confirmed that regulators will no longer enforce the 30-day suspension of Tesla's sales and manufacturing licenses after Tesla stops using the term "Autopilot" in vehicle marketing in the state. The decision, issued late on Tuesday, marked a formal settlement of the nearly three-year legal dispute between the two parties and ensured that Tesla's business operations in California, its largest U.S. market, would not be interrupted.
The dispute began in November 2023, when the California DMV accused Tesla of false advertising through terms such as "Autopilot" and "Full Self-Driving (FSD)", misleading consumers and exaggerating the functional capabilities of the assisted driving system. Although Tesla had previously changed the name of "Full Self-Driving Capability" to "Full Self-Driving (Regulatory Version)" to clarify that the driver needs to be monitored at all times, its insistence on retaining the name "Autopilot" caused the DMV to transfer the case to the California Office of Administrative Hearings. In December last year, an administrative law judge supported the DMV's appeal and ruled that Tesla should be punished by suspending its license for 30 days. In response, the DMV gave Tesla a 60-day grace period for rectification.
In response to regulatory pressure, Tesla took decisive corrective measures. The company not only eliminated related terms from marketing in California, but also completely stopped using the name "Autopilot" in the entire U.S. and Canadian markets in January this year. The California DMV confirmed in an official statement that given that Tesla has taken corrective actions and corrected related misleading terms, the regulatory authorities will withdraw its decision to suspend its dealer and manufacturer licenses.
In addition, this adjustment is also in line with Tesla's latest changes in its business model. In order to further promote its advanced software services, Tesla has adjusted its strategy and canceled the one-time buyout option originally priced at US$8,000. Instead, it has fully converted the FSD (regulatory version) to a monthly subscription system, currently priced at US$99 per month. Tesla CEO Elon Musk has previously stated that the subscription price may increase in the future as system capabilities improve.
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