A California administrative judge on Monday set back Tesla as the electic carmaker fends off allegations from the state's top regulator that it falsely marketed its vehicles' self-driving feature.
Judge Juliet Cox of the state Office of Administrative Hearings (OAH) rejected Tesla's effort to have the lawsuit brought by the California Department of Motor Vehicles dismissed. The judge said that if the allegations are true, they would support enforcement action against Tesla.
In a five-page ruling, Cox said it was too early to dismiss the DMV case before a formal hearing. Tesla had argued a hearing was unnecessary since Cox had enough documents to review and rule.
The DMV sued in July 2022 over accusations that Tesla mislead customers about vehicles with Autopilot and Full Self-Driving Technology. Tesla vehicles "could not at the time of those advertisements, and cannot now, operate as autonomous vehicles," the lawsuit said, according to Reuters.
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If found liable, Tesla could have its license to sell vehicles in California suspended and be required to make restitution to Tesla owners who reside in the state.
Tesla did not immediately respond to a request for comment. The DMV told Reuters its claims will be formally reviewed before the OAH on Sept. 9.
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On May 15, a San Francisco federal judge rejected Tesla's bid to dismiss a proposed nationwide class action claiming it misled consumers into believing their vehicles would soon have self-driving capabilities.
Tesla, whose CEO Elon Musk relocated its corporate headquarters from Palo Alto in California to Austin, Texas in 2021, has faced federal probes into whether its self-driving technology might have contributed to fatal car crashes.
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In April, Tesla reached a settlement in a lawsuit over a 2018 fatal crash that killed an Apple engineer who was behind the wheel of his Model X while on Autopilot, when the car swerved into a barrier on a highway near San Francisco.
Federal prosecutors are separately examining whether Tesla committed fraud by misleading investors about self-driving, Reuters reported.
Tesla describes Autopilot as an "advanced driver assistance sytem" on its website that can match the speed of surrounding traffic on cruise control and assist with steering in clearly marked lanes. Tesla's Full Self-Driving Capability promises to let the car "drive itself almost anywhere with minimal driver intervention."
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Features include guidance on highway on-ramp and off-ramps, automatic lane changes, automatic steering, acceleration and braking and obedience to traffic signals.
But Tesla has warned that Autopilot does not excuse drivers from paying attention on the road, and the technologies "do not make the vehicle autonomous."
Fox Business' Greg Wehner and Reuters contributed to this report.
