February 22, 2024

Brand new Tesla cars sit in a parking lot at a Tesla showroom on June 27, 2022 in Corte Madera, California.

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The California Department of Motor Vehicles has accused Tesla of engaging in deceptive practices regarding the marketing of its driver assistance systems, which are called Autopilot and Full Self Driving in the US, according to a filing with a state administrative agency.

Elon Musk’s electric car business has more at stake than its reputation — in a worst-case scenario, the company could temporarily lose the licenses that allow it to operate as a vehicle manufacturer and car dealer in California.

In a pair of July 28 filings with the California Office of Administrative Hearings, an official and DMV attorneys wrote:

“Rather than simply identifying product or brand names, these labels and descriptions ‘Autopilot’ and ‘Full Self-Driving Capability’ represent that vehicles equipped with ADAS features will operate as an autonomous vehicle, but vehicles equipped with these ADAS features they could not at the time of these advertisements and cannot now operate as autonomous vehicles.”

California DMV Deputy Director of the Office of Public Affairs Anita Gore told CNBC via email that if the department prevails, it “will require Tesla to advertise to consumers and better educate Tesla drivers about its capabilities Autopilot and ‘Full Self-Driving’ functions, including early warnings about feature limitations and other actions as needed given the violations.”

The Los Angeles Times had reported to the governing body regarding the DMV filings.

Tesla has fifteen days to respond to the charges before the administrative tribunal or the DMV will enter a default judgment.

Tesla includes its Autopilot driver assistance features in all of its newly built cars, and sells a premium FSD (or Full Self Driving) option for $12,000 up front or with a subscription for $199 a month. Sometimes, the company sells an Enhanced Autopilot option with a portion of the premium features included.

Elon Musk’s electric vehicle maker is also allowing drivers to test unfinished driver assistance features on public roads in the US through a program called FSD Beta (or Full Self Driving Beta).

Only Tesla owners who have the company’s premium FSD system installed can participate in the FSD Beta. Owners must obtain a high driver safety rating, as determined by the Tesla software that monitors their driving, and then maintain it to continue using FSD Beta. The company said it has already rolled out FSD Beta access to more than 100,000 drivers, most in the U.S.

Automakers, including Tesla, are now required to report major crashes involving advanced driver assistance systems to the National Highway Traffic Safety Administration.

Tesla vehicles made up about 70 percent, or more than 270, of reported crashes involving those systems between June 2021 and July 2022, according to federal data released in early July. The data are not intended to indicate which automotive systems may be safer.

NHTSA has also launched at least 37 special crash investigations into crashes involving Tesla vehicles where the company’s driver assistance systems were believed to be a factor. At least 17 deaths resulted from these collisions that inspired special NHTSA crash investigations.

NHTSA has also opened an evaluation of Tesla’s Autopilot technology to confirm whether it is defective and should be recalled, following a series of accidents in which Tesla vehicles crashed into stationary emergency vehicles.

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