Tesla faces California's false advertising charges related to autonomous driving
Tesla is facing allegations of false advertising regarding autonomous driving in California, with the accusation claiming that Tesla exaggerated the autonomous driving capabilities of its vehicles. A California administrative judge rejected Tesla's attempt to dismiss the allegations, and the case will proceed to formal trial. The California Department of Motor Vehicles investigation found discrepancies between Tesla's public claims and the materials submitted to the DMV. Tesla may face the suspension of its license to sell vehicles in California and may be required to compensate vehicle owners. This is a significant event for Tesla as California is one of its largest markets. Additionally, the U.S. government is also investigating whether Tesla's autonomous driving technology could lead to fatal accidents, and federal prosecutors are looking into whether Tesla misled investors regarding its autonomous driving capabilities
According to the financial news app Zhitong Finance, a federal judge in California, USA, today rejected Tesla's (TSLA.US) attempt to dismiss the appeal against false advertising allegations regarding its autonomous driving technology. The case will now proceed to a formal trial phase. This means that Tesla will face allegations in California regarding false marketing of its autonomous driving capabilities, with the accusation stating that the automaker exaggerated the autonomous driving capabilities of its vehicles.
It is reported that the California Department of Motor Vehicles (DMV) began investigating Tesla in 2021 for allegedly releasing misleading autonomous driving advertisements. The investigation found discrepancies between Tesla's public claims and the materials submitted to the DMV. In 2022, the DMV formally questioned Tesla, demanding a response to the allegations of exaggerating its system capabilities. The DMV accused Tesla of misleading consumers in its promotion of autonomous and fully autonomous driving technology vehicles, stating that "these vehicles in the advertisements cannot operate as autonomous vehicles, and they cannot operate now."
Administrative Law Judge Juliet Cox stated in the ruling that the outcome of the DMV's allegations will influence enforcement actions against Tesla. Possible actions the court can take include suspending Tesla's license to sell cars in California and requiring Tesla to compensate vehicle owners.
Data shows that California is Tesla's largest market in the United States, accounting for around 10% of the automaker's global deliveries, but sales have declined year-over-year for two consecutive quarters. In the first quarter of this year, Tesla's market share of electric vehicles in California dropped from 61.8% in the same period last year to 55.4%.
In recent years, the U.S. government has been investigating whether Tesla's autonomous driving technology could lead to fatal accidents. According to three sources familiar with the matter, federal prosecutors in the United States are separately investigating whether Tesla misled investors in terms of autonomous driving, potentially constituting marketing fraud.
Tesla has stated that its Autopilot (AP) autonomous driving assistance system allows vehicles to steer, accelerate, and brake on the lane, while the Full Self-Driving (FSD) system enables vehicles to follow traffic lights and change lanes. However, Tesla also claims that both technologies cannot be used as an excuse for drivers to not pay attention to the road conditions, and that these technologies "do not make the car fully autonomous."