California regulators are threatening to suspend Tesla's license to sell electric vehicles in the state unless the company modifies its marketing practices regarding its self-driving features. This potential suspension follows a ruling by Administrative Law Judge Juliet Cox, who determined that Tesla has engaged in deceptive marketing by using terms like "Autopilot" and "Full Self-Driving" to promote its autonomous technology. The judge's decision, released recently, recommends a 30-day suspension of Tesla's sales license, although regulators have opted not to pursue a proposed suspension of the company's manufacturing license at its Fremont, California plant.

Tesla will have a 90-day period to adjust its marketing to more accurately reflect the limitations of its self-driving technology to avoid the suspension. Following the state's action against Tesla in 2023, the company has already made some changes, including clarifying that its Full Self-Driving package requires human supervision.

In response to the ruling, Tesla characterized the decision as excessive regulation, asserting that no customers had reported issues with the technology. Despite the challenges posed by the potential suspension and a global downturn in demand, Tesla's stock price reached an all-time high of $495.28 before experiencing a decline.

The company has faced increased competition and a decline in sales, which fell by 9% from 2024 through the first nine months of 2025. Tesla's stock performance, however, reflects investor interest in Elon Musk's ambitions to develop artificial intelligence for autonomous vehicles and humanoid robots. Musk has long promised advancements in self-driving technology, but critics, including California regulators, have accused Tesla of overstating its capabilities, raising concerns about safety and consumer protection. The company has been involved in various lawsuits related to its self-driving claims, with a recent case resulting in a jury holding Tesla partly responsible for a fatal crash involving its Autopilot feature.