Thanks to our amazing community members like you, we've reached
the top 15 of Spotify's video podcasts, the top 10 audio
podcasts on both Apple and Spotify for the tech category,
so you all make this possible. If you want to support us more,
check out our Patreon. That's patreon.com/stage 0 News
so we can keep this free and open for you to enjoy.
Something interesting happened the other day.
I was looking through our stats on Spotify and Apple Podcasts
and I noticed that about 55% of you are not subscribed to the
show. That means 45% of you are
subscribed and I really do appreciate your support for the
other 55% of you are awesome. But I'm going to ask you for a
favor. Could you please hit the
subscribe button? It'll take you one second.
I'm going to promise you 10 years of this podcast for free,
No pay walls. I'm not going to charge you
anything ever, but I'm going to give you 10 years of this show
for free. I've already been doing it for
five years and I plan on doing it for 10 more.
And the only way that we can continue doing this is with your
support. So one second of your time to
hit the subscribe button right now would help the show
tremendously. Thank you so much.
A California administrative law judge just ruled that Tesla
engage in deceptive marketing for Autopilot and Full Self
Driving. Now the ruling came down
yesterday and the judge agreed with the state DMV's request to
suspend Tesla sales and manufacturing licenses for 30
days as a penalty. Now the DMV has stayed the order
and is giving Tesla 60 days to fix its marketing or face the
suspension. Tesla's response was immediate.
The company posted on X that sales in California will
continue uninterrupted. So what does that even mean?
What happens when the state's largest automaker refuses to
comply with a court ruling that says its product names are
misleading? The case has been winding
through California's Office of Administrative Hearings for
years. The DMV accused Tesla of making
customers believe that Autopilot and Full Self Driving were
capable of high levels of autonomy, which contributed to
overconfidence, crashes and even deaths.
Now, we're going to cover what the judge actually found, but
Tesla has to do to avoid suspension.
And while the company says it will not comply and what this
means for AI and autonomous vehicle markets in the future,
and we'll go right into that right after this short break.
You know, the California DMV filed accusations against
Tesla's manufacturing and dealer licenses back in November of
2023. And the company pointed to
written marketing materials primarily on Tesla's website.
They used the terms autopilot and full self driving
capability. One phrase that drew particular
attention was this. 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.
That statement was on Tesla's website.
The problem is that vehicles equipped with those features
could not operate as autonomous vehicles when that statement was
published, and they still cannot fully now.
Here's the key point to all of this.
So the judge found that the name Autopilot follows what the
ruling called a long but unlawful tradition of
intentionally using ambiguity to mislead consumers while
maintaining deniability. A reasonable person could
believe that a car on Autopilot does not require their constant
attention. That is incorrect.
The driver is still fully responsible for the vehicle at
all times. Now, on full self driving, the
court was much harsher. The judge found that this
feature name is, in the court's words, actually unambiguously
false and counterfactual. Tesla tried to argue that no
reasonable person could believe Full Self driving actually means
full Self Driving, and then the court rejected that argument.
Tesla has since added the word supervised to the name of its
Full Self Driving software and now reads Full Self Driving and
then supervised and Tesla's marketing materials.
The DOV acknowledged that change, but said it does not go
far enough now. Tesla's response was very
defiant. The company issued a statement
through a public relations firm saying this was a consumer
protection order about the use of the term Autopilot in a case
where not one single customer came forward to say there was a
problem and the judge addresses it directly.
Though the DMV is authority to regulate vehicle advertising
does not depend on evidence that any particular ad actually
deceived or harm any person, the agency is permitted to act
affirmatively to prevent deceptive advertising actually
before any harm occurs. Now, the judge also anticipated
Tesla's likely non compliance. She wrote that without the
incentive of suspension, Tesla offers no reason for the DMV to
expect they will alter the Autopilot name or stop
misrepresenting his vehicle's driver assistance functions to
the public. Now, Suspension of Tesla's
licenses is a reasonable remedy now.
The DMV's original decision included a 30 day suspension of
both Tesla's sales license and its manufacturing licenses.
Now the agency softened that a little bit.
It permanently stayed the manufacturing suspension to
avoid disrupting operations at Tesla's Fremont factory, which
builds hundreds of thousands of cars per year, including all
North American Model 3 sedans. Now the sales license suspension
is what remains on the table. California's Tesla's largest
market in the USA, 30 day shutdown of sales would have a
significant impact on the company's quarterly numbers.
Tesla knows this. The DMV knows this.
The leverage is part of why the agency gave Tesla 60 days to
comply rather than enforcing the suspension immediately.
And Tesla has two options. It can change its marketing to
remove the term Autopilot or make it software actually
capable of autonomous driving. The first option is a branding
concession that Tesla has resisted for almost a decade.
Second option does not exist yet.
Tesla's vehicles are classified as Level 2 driver assist
systems, which means a human must remain engaged and ready to
take over at all times. And this ruling lands at the
same moment that Tesla is advancing its robotaxi test in
Austin. The company removed safety
monitors from some of their cars over the weekend from its small
fleet in the city. It had been offering rides to
customers with a safety monitor either in the driver's seat or
the passenger seat. Now those vehicles are operating
without a human backup. Tesla says the Austin robo taxis
are running a different version of the driving software than
what customers have in their cars.
That distinction matters legally, but it also shows how
Tesla is pushing forward on autonomy claims while
simultaneously fighting a ruling that says its current claims are
misleading. Now, Tesla has faced multiple
investigations over similar allegations.
The California Attorney General, Department of Justice, and the
Securities and Exchange Commission have all looked into
whether Tesla's marketing around partial autonomy systems was
misleading. The company has also settled
several personal civil lawsuits over crashes involving
Autopilot. This ruling is the first major
state level decision that could force Tesla to change how it
describes its products. Now, DMV Director Steve Gordon
said in a statement that the decision confirms the department
will hold every vehicle manufacturer to the highest
safety standards. He added that Tesla can take
simple steps to pause the decision and permanently resolve
the issue. These steps, according to
Gordon, are ones that autonomous vehicle companies and other
automakers have already achieved in California's marketplace.
Now, Tesla has 60 days to comply.
If it doesn't, the DMV will suspend its dealer license for
30 days. Tesla says sales will continue
uninterrupted, and the state says otherwise.
Now we're going to find out in two months which statement holds
true. Hey, thank you so much for
listening today. I really do appreciate your
support. If you could take a second and
hit the subscribe or the follow button on whatever podcast
platform that you're listening on right now, I greatly
appreciate it. It helps out the show
tremendously and you'll never miss an episode.
And each episode is about 10 minutes or less to get you
caught up quickly. And please, if you want to
support the show even more, go to patreon.com/stagezero and
please take care of yourselves and each other and I'll see you
tomorrow.