Benzinga - by Anan Ashraf, Benzinga Editor.
A California administrative judge has reportedly denied Tesla Inc.’s (NASDAQ:TSLA) bid to dismiss claims by the state’s Department of Motor Vehicles (DMV) alleging the company misled consumers by overstating its vehicles’ self-driving capabilities.
What Happened: The judge, Juliet Cox, of the state Office of Administrative Hearings (OAH) on Monday rejected Tesla’s request to dismiss the accusations made by the California DMV, Reuters reported. If true, the accusations of the DMV would support an enforcement action against Tesla, the judge said while adding that it would be premature to dismiss the DMV case before a formal hearing.
In July 2022, the DMV accused Tesla of misleading consumers about vehicles with Autopilot and Full Self-Driving technology alleging they did not enable vehicle autonomy at the time or even now. The DMV sought the suspension of Tesla’s license to sell vehicles in California and also for the company to compensate vehicle owners. The DMV’s claims will be formally reviewed before the OAH on Sept. 9, as per Reuters.
Why It Matters: Tesla is currently laser-focused on vehicle autonomy and is attempting to improve its full self-driving (FSD) software to enable vehicles to operate without human intervention.
FSD is an advanced version of Tesla's Autopilot and includes features like auto lane change and auto park. In a vehicle safety data report last month, Tesla alleged that its vehicles using Autopilot are relatively safer than its vehicles which do not use the system, and other non-Tesla vehicles.
However, safety concerns remain. In December, Tesla recalled a record-breaking 2.03 million vehicles equipped with all versions of Autosteer (an Autopilot feature), citing insufficient controls to prevent misuse. The company addressed the issue through a software update. The National Highway Traffic Safety Administration (NHTSA) commenced a probe into the remedy in April, concerned that the update is insufficient, and is now seeking further data from Tesla before July 1.
In May, Tesla was also asked by a U.S. District Court to confront a proposed class-action lawsuit claiming the company misled consumers regarding its cars’ self-driving capabilities.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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