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California DMV Probes Tesla Over Self-Driving Claims

By Danny Vena - May 18, 2021 at 12:10PM

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The electric vehicle maker is in the regulatory spotlight yet again.

The California Department of Motor Vehicles has launched an investigation to decide if Tesla (TSLA 4.67%) misleads buyers by offering its vehicles with "full self-driving capability." The state regulatory body said the electric vehicle maker was "under review," according to DMV spokesperson Anita Gore, though she refused to provide additional details, saying, "The DMV cannot comment on the pending review." 

Tesla offers buyers a $10,000 self-driving package that equips the vehicle to take highway exit ramps, change lanes, and even stop at traffic lights and stop signs on its own. But those skills fall far short of the widely recognized capabilities of a fully autonomous vehicle. 

Vehicle running self driving mode and a woman driver reading book.

Image source: Getty Images.

The California DMV previously said that Tesla's Autopilot and full self-driving technologies meet the criteria for Level 2 driver-assist technologies and require full driver engagement, according to guidelines laid out by the Society of Automotive Engineers. As a result, Tesla isn't required to submit the exhaustive data required by other autonomous driving companies including Alphabet's (GOOGL 2.39%) (GOOG 2.36%) Waymo, General Motors' (GM 2.65%) Cruise, and others.

There have been numerous examples involving drivers leaving the driver's seat of a Tesla or attempting to have the vehicle drive itself, sometimes with fatal results. Earlier this month, a driver in California died in a crash when his Tesla hit an overturned semi near Los Angeles. The driver had posted videos showing himself without his hands on the wheel prior to the accident. In Texas last month, two men were killed when the Tesla they were in crashed with no one in the driver's seat. These incidents may have prompted the California DMV's probe.

This isn't the first time Tesla has been investigated over its self-driving claims. A Munich court ruled that the company had been misleading buyers and banned Tesla's German subsidiary from using the term "full potential for autonomous driving" and "autopilot inclusive" on its website and in any other consumer-facing materials. 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Alphabet (A shares) and Tesla. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Tesla. The Motley Fool has a disclosure policy.

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