California DMV must confront Tesla over false claims about Autopilot

Tesla Inc. failed to convince an administrative judge that a California regulator had overstated the self-driving abilities of its vehicles. This is one of many ongoing regulatory investigations into the electric car maker’s marketing.

California Department of Motor Vehicles alleges that Tesla made false statements regarding its “Autopilot”, “Full Self-Driving”, driver-assistance feature, which led customers to believe it was more advanced than it actually is.

The ruling on Monday comes less than one month after a San Francisco federal judge ruled that Tesla would have to face a class-action lawsuit from consumers who made similar claims.

While neither decision addressed the merits, it represents a new setback for Tesla at a time when Elon Musk’s chief executive has staked his company’s future in autonomy.

Musk said in April that Tesla was “going to the wall” for autonomy, and committed the company to a concept of a self-driving car called robotaxi. Musk has been talking a lot about autonomy over the past decade and convinced customers to pay thousands for Full Self-Driving or FSD.

Musk has said that the name FSD is a misnomer, as it requires constant supervision. It also does not render vehicles autonomous.

Tesla is also facing federal investigations into whether Autopilot defects have led to fatal crashes. Federal prosecutors and the Securities and Exchange Commission are investigating whether Tesla has made false claims to the public about this feature.

Tesla’s lawyers argued in the DMV case at an hearing on June 7, that the statements are not misleading, given that there have been numerous disclosures about the features requiring active supervision by drivers.

Tesla’s attorneys also argued that marketing their vehicles as having “full self-driving capabilities” was not an assertion that cars were fully autonomous at the time, but that they would be able to drive themselves in the future following software updates.

Administrative Law Judge Juliet Cox agreed with Greg Call, the DMV lawyer. Call argued that it was unfair to dismiss the case before the DMV had the chance to present its evidence in a hearing scheduled for later this year.

Tesla did not show that California’s DMV would “necessarily” be unable to provide any relevant evidence, Cox wrote in his order.

Tesla and the California Department of Motor Vehicles did not immediately respond to comments. Bloomberg

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