Tesla(US:TSLA) CNETยท2025-07-21 21:40Core Viewpoint - The California Department of Motor Vehicles (DMV) has filed a lawsuit against Tesla, alleging false advertising regarding its "Autopilot" and "Full Self-Driving" features, seeking a 30-day suspension of Tesla's license to sell electric vehicles (EVs) in California while the case is adjudicated [1][5]. Group 1: Legal Proceedings and Implications - The DMV's request for a suspension could significantly disrupt Tesla's operations, especially following a notable decline in sales during the first half of 2025 due to various external factors [2]. - A suspension would hinder Tesla's recovery from recent sales dips, particularly in California, which accounts for over a third of EV sales in the U.S., potentially impacting sales momentum until the expiration of the Federal EV tax incentive in September [2][3]. - The DMV's allegations stem from claims that Tesla misrepresents the capabilities of its advanced driver assistance systems (ADAS), with the DMV seeking restitution from Tesla [5][6]. Group 2: Tesla's Defense and Market Position - Tesla argues that the DMV has been aware of its branding for "Autopilot" and "Full Self-Driving" since their introduction in 2014 and 2016, suggesting that this constitutes implicit approval [7]. - The company has made adjustments to its product descriptions, now labeling its highest-tier ADAS feature as "Full Self-Driving (Supervised)," indicating that active driver supervision is required [7]. - If the suspension is enacted, Tesla may face increased inventory levels at dealerships as it attempts to shift stock to markets not affected by the suspension [3].