This could get messy.
California is probably the most electric vehicle-friendly state in the country and its policies reflect that. You can hardly go five minutes without spotting a Tesla Model 3 on the road. The California Air Resources Board (CARB) has issued stricter emissions standards than the feds require for years and announced just last year that it'll be the first state to ban sales of new passenger vehicles with internal combustion engines beginning in 2035. Other states have since followed suit. The Golden State's trendsetting status could now potentially mean trouble for Tesla which is headquartered in California.
According to the LA Times, the EV automaker is currently "under review" by the California Department of Motor Vehicles over whether it intentionally mislead customers with claims of "full self-driving capability." This $10,000 package, as Tesla finally admitted in March, is not rated at Level 5 but rather Level 2. As a refresh, self-driving is ranked on a scale with Level 5 being the highest where no human driver is necessary.
Level 2 is what Tesla's existing Autopilot system is rated at. Drivers are still required to keep two hands on the wheel at all times even when the system is engaged. But Full Self-Driving (FSD) was supposed to be different, at least that's what Tesla advertised. FSD is capable of changing lanes, taking highway exit ramps, and stop at traffic lights and stop signs without direct driver intervention, but that's where it ends.
The DMV is currently examining the most specific details written on Tesla's website about its FSD claims. If you look carefully, the small print states the system "does not make the car autonomous" and "active supervision" by the driver is necessary. The newspaper's report cites an expert on automated vehicle law who, in their professional opinion based on an existing federal law regarding trademarks, believes Tesla's advertising doesn't offer a sufficient defense "against deceptive marketing allegations."
It's worth noting that the National Highway Traffic Safety Administration has no control over vehicle advertising, but DMVs do. Tesla CEO Elon Musk has been claiming for five years now that self-driving Teslas are on the way, though he has repeatedly missed his own deadlines.
The FSD "beta" testing software was released a few months ago to a select group of customers for real-world testing, but the promised $10k rollout hasn't happened yet. But even once it does, customers will have an advanced Level 2 system - not the Level 5 the California DMV alleges buyers were lead to believe they'd be getting.