Tesla Robotaxi: Elon Musk’s California Driverless Promise – Update

Tesla Inc. Has filed a lawsuit against the California Department of Motor Vehicles (DMV), challenging a regulatory ruling that found the automaker engaged in false advertising regarding its self-driving technology. The legal action, reported February 26, 2026, follows a decision issued two months ago by California’s Office of Administrative Hearings, which determined Tesla misled consumers about the capabilities of its “Autopilot” and “Full Self-Driving” features. The DMV initially threatened a 30-day suspension of Tesla’s licenses to manufacture or sell vehicles in the state, but ultimately opted not to impose the penalty after Tesla revised its marketing language. According to the agency, Tesla has ceased using the term “Autopilot” in its marketing materials within California, replacing it with “supervised.” The company now markets its most advanced driver-assistance system as “Full Self-Driving (Supervised)” and offers it through a subscription model. Despite the DMV backing down from a suspension, Tesla is pursuing legal action, arguing that the regulator’s findings continue to damage its reputation, and business. In a complaint dated February 13, Tesla’s attorneys alleged the DMV “wrongfully and baselessly” labeled the company a “false advertiser” over its previous use of “Autopilot” and “Full Self-Driving.” Tesla maintains its branding accurately reflected the fact that its driver-assistance features require active driver supervision. The dispute stems from a 2022 accusation by the DMV that Tesla misled consumers with its use of the terms “Autopilot” and “Full Self-Driving” for its advanced driver-assistance systems. An administrative law judge subsequently found the company had indeed misled drivers regarding the ability of Tesla cars to drive themselves. This legal challenge comes as Tesla prepares to potentially halt production of its Model S and X vehicles in the second quarter of 2026, with plans to convert its Fremont, California factory to produce robots. CEO Elon Musk announced the shift on a recent conference call, signaling a strategic pivot for the electric vehicle manufacturer. The California DMV has not yet responded to requests for comment on Tesla’s lawsuit. The case is ongoing in California Superior Court.