Tesla Faces California Sales Suspension Over Ad Claims

A significant ruling by a California administrative law judge could lead to a 30-day suspension of Tesla's sales within the state. The California Department of Motor Vehicles had previously accused the electric vehicle manufacturer of misleading consumers through its advertising of Autopilot and Full Self-Driving technologies. These claims suggested a level of autonomous driving capability that vehicles did not possess.

While the judge has agreed with the DMV's assessment of deceptive marketing, Tesla is being granted a 90-day period to rectify the situation. During this time, the company must remove any untrue or misleading language from its product marketing materials. A sales and manufacturing suspension would only be implemented if Tesla fails to comply within this grace period.

This potential penalty carries substantial weight, as California is a critical market for Tesla, representing nearly one-third of its national sales. Furthermore, the state is home to Tesla's Fremont plant, where key models like the Model S, X, 3, and Y are manufactured, underscoring the severe impact such a suspension could have on the company's operations.