SACRAMENTO, Calif. — The California Department of Motor Vehicles has opted not to suspend Tesla’s sales and manufacturing licenses for 30 days, following the company’s decision to discontinue the use of the term “Autopilot” in its marketing efforts within the state. The move allows Tesla to continue its operations uninterrupted in its largest U.S. market and brings closure to a prolonged regulatory dispute.

This decision comes after the DMV raised concerns in November 2023 that Tesla was misleading consumers through its marketing of both its Autopilot basic driver assistance system and the more advanced Full Self-Driving (FSD) software. The department argued that these terms misrepresented the functions and safety capabilities of the technology, potentially misleading customers.

In response to the DMV’s findings, Tesla modified its language, changing “Full Self-Driving Capability” to “Full Self-Driving (Supervised)” to better clarify the need for driver oversight. However, the company initially retained the Autopilot designation, which led to further scrutiny and subsequent legal proceedings.

In December, an administrative law judge sided with the DMV, ruling in favor of a temporary suspension of Tesla’s sales and manufacturing licenses as a penalty for the company’s marketing practices. Although the DMV supported the ruling, it granted Tesla a grace period of 60 days to make necessary adjustments.

Following the inquiry, Tesla took action by eliminating the use of the term “Autopilot” in its promotional materials. According to DMV officials, the automaker’s compliance with this directive allowed it to avoid the penalties that could have impacted its ability to conduct business in California.

Moreover, in a broader move to enhance clarity and compliance, Tesla completely discontinued the Autopilot feature in January in both the U.S. and Canada. The shift aimed not just to meet regulatory expectations but also to encourage customers to transition to the FSD system, which requires an additional purchase.

The Full Self-Driving package, initially available at a one-time cost of $8,000, is now offered through a subscription model at $99 per month. This change reflects the company’s efforts to ensure customers are aware of the system’s ongoing development and the associated costs, which Tesla CEO Elon Musk has indicated may rise as the technology advances.

As the landscape of electric vehicles continues to evolve, the California DMV’s actions serve as a reminder of the scrutiny that companies like Tesla face regarding the marketing of sophisticated automotive technologies. The resolution of this case not only highlights regulatory diligence but also underscores the importance of clear communication between manufacturers and consumers.