Tesla could have its license to sell and produce cars in California temporarily revoked due to claims of false advertising.
What's happening?
According to Electrek, a California judge said Tesla used "deceptive marketing" with its Full Self-Driving system. The judge ruled that the electric automaker should have its California license revoked for 30 days.
Tesla's marketing claims have been under investigation for years, per Electrek. In 2021, the California Department of Motor Vehicles launched an investigation into whether the company had lied to consumers about FSD.
The case was later slated for trial. Electrek said a new law has since banned automakers from tricking drivers into thinking cars have more autonomous features than they actually do.
"Tesla's continued failure to deliver competent AI is just a painful prelude to the rest of the AI bubble," one Electrek commenter wrote.
Why is Tesla's false advertising case important?
Revoking Tesla's license to sell vehicles in California could impact a consumer's decision to invest in EVs and slow down the widespread adoption of planet-friendly vehicles. Tesla, in particular, already struggled with sales in 2025.
According to InsideEVs, data showed that Tesla sales in the United States will be down by nearly 9% year-over-year.
The automaker faced challenges in Europe as well. As The Guardian observed, Tesla's EU sales struggled to keep up with rival BYD — BYD registrations nearly tripled in Europe compared to last year.
While hundreds of thousands of Americans bought EVs before the federal tax credit expired, it wasn't enough to keep sales numbers up.
New data also showed that overall EV sales in the U.S. will fall by 2.1% in 2025, per InsideEVs. It's the first year-over-year drop in EV sales since 2019.
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Tesla may have time to fix its marketing strategy. The California DMV said it will give the automaker 60 days to correct its marketing before the license is taken away, according to Electrek.
Meanwhile, Tesla introduced more affordable models of its Model 3 and Model Y in October. Although the models have fewer premium features, the lower-priced options help make EVs more accessible to drivers.
Drivers can also take advantage of several benefits when they purchase a planet-friendly vehicle. Making your next car an EV can help you save hundreds on high gas prices and maintenance. EVs also have zero tailpipe emissions, which means less pollution in the air.
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