Please ensure Javascript is enabled for purposes of website accessibility

California DMV Probes Tesla Over Self-Driving Claims

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$900.09 (4.67%) $40.20
Alphabet Inc. Stock Quote
Alphabet Inc.
$121.68 (2.39%) $2.84
General Motors Company Stock Quote
General Motors Company
$39.48 (2.65%) $1.02
Alphabet Inc. Stock Quote
Alphabet Inc.
$122.65 (2.36%) $2.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.