Business

Tesla Given 90-Day Grace Period by California
By Reuters | 16 Dec, 2025

The pioneering EV-maker's ability to continue to sell in California is in jeopardy due to DMV charges that its use of the terms "Autopilot" and "Full Self-Driving" mislead consumers.

A California regulator has allowed Tesla to continue selling vehicles in the state for now, the latest development in a case in which the electric vehicle maker had been accused of falsely marketing and overstating self-driving capabilities.

The Department of Motor Vehicles accepted a judge's proposals to suspend Tesla's manufacturing and sales licenses for 30 days, but immediately put the suspensions on hold, DMV director Steve Gordon told reporters.

The DMV had accused Tesla of misleading consumers by using brand names Autopilot and Full Self-Driving for their vehicles' advanced driver assistance features. The regulator had told Judge Juliet Cox of the state Office of Administrative Hearings that the names falsely implied the cars operate autonomously.

But Gordon said on Tuesday the DMV wants to give Tesla "one more chance to be able to remedy the situation," adding that he hoped Tesla will "find a way to get these misleading statements corrected."

The DMV said it stayed the suspension of Tesla's ability to sell vehicles for 90 days and its manufacturing license indefinitely.

Tesla did not immediately respond to a Reuters request for comment.

(Reporting by Abhirup Roy in San Francisco and Chris Kirkham in Los Angeles; Additional reporting by Juby Babu in Mexico City; Editing by David Gregorio and Christopher Cushing)