Tesla initiated legal action against the California Department of Motor Vehicles on March 1, challenging the regulator’s directive to remove the “Autopilot” term from its marketing materials. The state cited a false advertising row as the basis for the removal, prompting Tesla’s formal dispute in Superior Court.

California’s DMV argued that Tesla’s use of “Autopilot” misleads consumers into overestimating the system’s capabilities, raising safety and liability concerns. The regulator demanded that Tesla cease using the term across its website, vehicle manuals and promotional materials to ensure clear consumer understanding.

The lawsuit represents a direct challenge to state oversight of advanced driver-assistance systems and could set a precedent for other regulators. A favorable ruling for Tesla may allow it to retain its branding, while a loss could force rebranding efforts and affect consumer perception, potentially influencing sales and stock valuation.