Tesla Must Face Autopilot False Ad Claims by California DMV

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Tesla Inc. failed to persuade an administrative judge to dismiss claims by a California regulator that the company overstated its vehicles’ self-driving capabilities — one of several ongoing regulatory investigations of the electric-car maker’s marketing.

The California Department of Motor Vehicles has alleged that Tesla disseminated false statements about its “Autopilot” and “Full Self-Driving” driver-assistance features, leading customers to believe they are more advanced than they are.

Monday’s ruling comes less than a month after a federal judge in San Francisco ruled that Tesla must face a proposed class-action lawsuit by consumers making similar claims.

While neither ruling addressed the merits of claims against Tesla, they represent a fresh setback for the carmaker just as Chief Executive Officer Elon Musk has staked the company’s future on autonomy.

Musk declared in April that Tesla is “going balls to the wall for autonomy” while committing the car maker to a next-generation, self-driving vehicle concept called the robotaxi. The billionaire entrepreneur has talked a big game about autonomy for over a decade, and has persuaded customers to pay thousands of dollars for its Full Self-Driving, or FSD, feature.

The name is a misnomer — FSD requires constant supervision and doesn’t render vehicles autonomous — but Musk has repeatedly predicted it’s on the verge of measuring up to the branding.

Meanwhile, the company faces federal probes into whether defects in Autopilot have contributed to fatal crashes, as well as investigations by federal prosecutors and the Securities and Exchange Commission into whether Tesla made misleading claims about the feature to the public.

In the DMV case, Tesla’s attorneys argued at a June 7 hearing that the statements at issue aren’t misleading given numerous disclosures that the features require active supervision from drivers.

Tesla’s lawyers also contended that marketing its vehicles as having full self-driving “capabilities” is not an assertion that the cars are currently fully autonomous, but rather a statement that they will be capable of driving themselves in the future after software updates.

Administrative Law Judge Juliet Cox sided with the DMV’s lawyer, Greg Call, who argued that the case shouldn’t be thrown out before the DMV has had a chance to introduce its evidence at a hearing later this year.

Tesla didn’t show that the California DMV “necessarily will be unable to present any relevant evidence,” Cox wrote in the order.

Tesla and the California Department of Motor Vehicles didn’t immediately respond to requests for comment.