Tesla will continue selling vehicles in California after the state’s Department of Motor Vehicles (DMV) confirmed the company has taken “corrective action” regarding how it markets its driver-assistance technology, according to a report. The move allows the automaker to avoid a potential 30-day sales suspension. Regulators had been prepared to suspend Tesla’s sales license following a judge’s ruling in December, but the company was given time to comply. Late Tuesday, the DMV said Tesla updated its wording to clarify that the features are not fully autonomous and require constant supervision.
The End of an Era for Autopilot
To meet regulatory expectations in the state, Tesla has effectively retired the “Autopilot” name in California. Separately, Tesla discontinued Autopilot for new vehicle orders in the United States and Canada last month; new deliveries now include Traffic Aware Cruise Control (TACC) as the standard feature.
For years, every Tesla shipped with the Basic Autopilot suite, which included TACC and Autosteer — the feature that keeps the vehicle centered in its lane. Access to those advanced lane-keeping capabilities now requires a paid Full Self-Driving (FSD) subscription. The company also retired its Autopilot steering wheel symbol last fall.
Supervised vs. Unsupervised
A key element of the “corrective action” is how Tesla presents its top-tier software. The company has increasingly referred to it as Full Self-Driving (Supervised). By including “Supervised” in the name, Tesla underscores that the current system is not fully autonomous and needs driver oversight. The company describes this as a step toward a future, unsupervised version of Full Self-Driving.
The legal battle between Tesla and California regulators began in 2021, when the DMV initiated an investigation into the marketing of “Autopilot” and “Full Self-Driving” capabilities. The agency accused Tesla of misleading consumers by implying the vehicles could drive themselves. In May 2021, Tesla marketed its Advanced Driver-Assistance Systems (ADAS) features with the claim: “The system is designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.”
Tesla’s defense, as reported by Electrek, centered on the argument that the DMV had been aware of the “Autopilot” and “Full Self-Driving” branding since 2014 and 2016, respectively, suggesting a statute of limitations should apply to claims of misleading marketing. However, an administrative law judge sided with the DMV after a five-day hearing in 2025, and that ruling was upheld in December 2025.
The resolution comes as Tesla navigates increasing scrutiny over its driver-assistance features. As The Guardian noted, the DMV narrowed its focus to the term “Autopilot” after Tesla revised its use of “Full Self-Driving” to emphasize the need for driver supervision. “Autopilot” enables Tesla vehicles to accelerate, brake, and remain within their lanes on highways, while “Full Self-Driving” allows vehicles to change lanes and respond to traffic signals on city streets – but always with the expectation of driver intervention.
The outcome avoids a significant disruption for Tesla in its largest market. According to Business Insider, the agreement ends a three-year legal dispute and allows Tesla to keep its dealerships and plants open in the state.
The California DMV’s decision underscores the growing pressure on automakers to accurately represent the capabilities of their advanced driver-assistance systems. The shift in terminology – from “Autopilot” to “Supervised” – reflects a broader industry trend toward transparency and a more cautious approach to autonomous vehicle technology.
