A California judge ruled that Tesla Autopilot is deceptive marketing. Now, Tesla faces a possible state-wide ban.

Tesla has found itself in hot water, and it isn’t due to a recall or cratering sales numbers for a change. On Tuesday, a judge in California issued a ruling that slaps Tesla with a 30-day suspension from doing business in the state over Tesla's use of the term "Autopilot" to market its driver assistance systems. The ruling goes into effect on Jan. 15; however, Tesla will have 60 days to either stop using the term Autopilot or make certain changes to the system.

Tesla, for its part, says sales will continue uninterrupted. Earlier this week, the company also reposted a video on X showing a Tesla robotaxi driving in Austin, Texas with no drivers or passengers present in the vehicle at all, along with the tongue-in-cheek comment, "Just saying."

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According to court documents, the California DMV believes that the name “Autopilot” and Tesla’s “Full Self-Driving Capability” (FSD) do not accurately describe the level of autonomy with which the car can drive itself. The DMV filed a complaint, which demanded that Tesla change the names of its advanced driver assistance system (ADAS) in order to more accurately describe their capabilities. 

This assertion is based on the NHTSA’s Levels of Automation system, where Level 0 vehicles have no autonomy and Level 5 vehicles are fully autonomous. Autopilot and the Full Self-Driving Capability are both rated at a Level 2, and the court says that they should’ve been at Level 3 or higher to have earned their names, so to speak. The ruling now requires Tesla to either implement changes to bring its driver assistance systems up to Level 3 or stop using the term Autopilot.

Judge Juliet E. Cox, who presided over the complaint, agreed with the DMV, issuing a 30-day stay of business for Tesla. Perhaps unsurprisingly, Tesla responded by openly stating that it intends to ignore the court order.

“This was a ‘consumer protection’ order about the use of the term ‘Autopilot’ in a case where not one single customer came forward to say there’s a problem,” Tesla posted on X.

Per TechCrunch, the judge foresaw this potential pushback and stated that the “DMV’s authority to regulate vehicle advertising does not depend on evidence that any particular advertising has deceived or harmed any person.”

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If Tesla doesn't take mitigating action within 60 days of the order going into effect, the ban will hold, and Tesla will face additional penalties for continuing to sell cars in the state.

Tesla’s loss in court is the latest in several cases in 2025 that involve crashes or deaths from the use of Autopilot. In July, the family of Naibel Benavides filed suit in Miami, Florida, after the driver died while driving an Autopilot-equipped Tesla. The jury in that suit rather quickly found Tesla to be liable and ordered Tesla to pay over $240 million in damages. This was the first such court case where Tesla was found at least partially liable for an automobile accident involving Autopilot. 

However, emerging evidence suggests that driver-assisted and autonomous vehicles may be safer overall than traditional vehicles.