Tesla has taken its disagreement with the California Department of Motor Vehicles (DMV) to court, filing a lawsuit to challenge the agency’s earlier decision that accused the company of misleading consumers about its Full Self-Driving (FSD) system.
This lawsuit comes after a 2025 ruling by the California DMV, which found that Tesla’s advertising and branding of its driver-assistance technology made “false or misleading” claims about the car’s autonomous features. The DMV ordered Tesla to change its marketing and warned of possible penalties.
Lawsuit seeks to overturn DMV determination
According to TechCrunch, Tesla’s complaint argues that the California DMV exceeded its authority and mischaracterized the company’s statements about FSD. The automaker is seeking declaratory and injunctive relief, asking the court to invalidate the DMV’s findings.
TechBuzz.ai reported that Tesla contends the regulator’s ruling amounts to administrative overreach, asserting that its disclosures clearly state that FSD requires active driver supervision. Tesla maintains that its terminology and product descriptions align with federal guidelines governing advanced driver-assistance systems.
The company’s filing marks a continuation — rather than a resolution — of a dispute that many observers had believed was nearing conclusion after the DMV’s initial action.
Background of the regulatory dispute
The conflict centers on Tesla’s use of the term “Full Self-Driving” and promotional materials describing the system’s capabilities. The California DMV determined that the branding could lead consumers to believe the vehicles were capable of autonomous operation without human oversight.
Tesla, however, has consistently maintained that FSD is a driver-assistance feature and that vehicle operators must remain attentive and ready to take control at all times. The company argues that the DMV’s interpretation of its marketing language is legally flawed.
The case could hinge on whether the court views the DMV’s ruling as a permissible exercise of consumer protection authority or an improper restriction on product labeling and speech.
Broader implications for autonomous vehicle oversight
The lawsuit highlights ongoing regulatory tensions over how emerging autonomous driving technologies are described and supervised at the state level. California, one of the largest automotive markets in the United States, has been at the forefront of autonomous vehicle rulemaking and enforcement.
The outcome of Tesla’s challenge could influence how state agencies nationwide approach advertising standards and compliance requirements for advanced driver-assistance systems.
The case may also clarify the boundaries between state consumer protection powers and federal oversight in the evolving self-driving sector.
What comes next
With litigation now underway, the matter will proceed through the courts, where judges will evaluate the scope of the DMV’s authority and Tesla’s claims of regulatory overreach.
As the case continues, it is likely to attract interest from legal experts, car makers, and policymakers who are watching how rules for self-driving cars develop.
