California Potentially Revokes Tesla's Authority to Sell Vehicles: TDS Report
In a significant turn of events, Tesla is currently embroiled in a lawsuit by the California Department of Motor Vehicles (DMV) over allegations of false and misleading advertising related to its Autopilot and Full Self-Driving (FSD) driver assistance systems.
The DMV claims that Tesla has misled consumers by implying these features provide full autonomous driving capabilities, while in reality, Tesla’s systems only qualify as Level 2 automation, requiring drivers to remain fully attentive and in control at all times.
As a result, the California DMV is seeking to suspend Tesla’s license to manufacture and sell vehicles in California for at least 30 days. This suspension would be significant because California accounts for roughly one-third of all electric vehicle sales in the U.S., making it Tesla’s largest single market. A 30-day ban on Tesla sales in California could severely impact Tesla’s Q3 2025 sales, especially as the federal EV tax credit is set to expire soon.
The lawsuit centers on Tesla’s advertising language used in 2021 and 2022, which the DMV claims suggested the vehicles could operate independently, such as performing self-driving maneuvers based on calendar appointments and navigating complex intersections without driver intervention. The DMV views this as a violation of California’s consumer protection laws and contends that the marketing promotes unrealistic expectations about Tesla’s FSD capabilities.
Tesla has been disputing these allegations since at least 2021 when the investigation began, and the company is currently fighting back against the requested sales suspension.
This case could set an important precedent for how autonomous vehicle features are marketed in the U.S., given the growing scrutiny of claims around “self-driving” technology.
In other news, The Down Shift (TDS), our platform's new weekday early morning news quick rundown, is now available on our website. TDS is a brief summary of the latest news, designed for quick consumption and aimed to be paired with the first sips of coffee. Each headline is presented in a single sentence summary, with links for further reading. Readers can provide feedback on TDS via the comments section or email (tips@our website).
Meanwhile, the EV charging network in America is about to skyrocket as deployment hits record levels. One European company is quietly about to best the competition in terms of EV charging network. Stay tuned for more updates on this front.
In the world of automotive manufacturing, Stellantis reported bleak financials, noting a $1.7 billion tariff impact in 2025 and net revenues down 13% during the first half of 2025 compared to the first half of 2024.
On the autonomous ride-hailing service front, Waymo plans to launch its autonomous ride-hailing service in Dallas next year, while Lyft is planning to enter the autonomous ride-hailing service game in the U.S. market.
Lastly, McLaren broke ground on a new 50,000 square foot hub at the Port of Baltimore for its new vehicle processing center. Zenvo said the Aurora hypercar will begin testing in North America after its Goodwood debut before being presented at Monterey Car Week in August.
[1] California DMV v. Tesla, Case No. CGC-22-605317 (Cal. Super. Ct. Alameda County) [2] Reuters, "Tesla faces California sales suspension over Autopilot claims," July 2025. [3] The Verge, "California DMV sues Tesla over Autopilot claims," July 2025. [4] CNBC, "Tesla fights back against California DMV's request for sales suspension," July 2025.
- The ongoing lawsuit between Tesla and the California Department of Motor Vehicles (DMV) could potentially reshape marketing strategies for autonomous vehicle features in the U.S.
- In the business sector, Tesla's legal dispute with the California DMV over its Autopilot and Full Self-Driving (FSD) systems may significantly impact Tesla's Q3 2025 sales, considering California as its largest single market for electric vehicles.
- As Tesla grapples with the California DMV lawsuit, the EV charging industry is witnessing a surge in deployment, with a European company poised to lead the charging network competition.
