Newsom seeks to halt Tesla operations, targeting Elon Musk
Now, officials at the Department of Motor Vehicles have alleged in court Tesla deceived consumers with its autopilot and self driving features. Lawyers representing the DMV maintain Tesla engaged in false advertising when it promoted 'autopilot', 'self driving capability' and a system 'able to conduct short and long-distance trips with no action required by the person in the driver's seat.' The suit was first filed in July 2022 and amended in November 2023. The state is seeking to have Tesla's licenses to manufacture and sell cars suspended in California for at least 30 days.
Lawyers would also like Tesla to pay an as-yet-undetermined sum as restitution. 'These labels and descriptions represent specifically that respondent (Tesla)'s vehicles will operate as autonomous vehicles, which they could not and cannot do,' Attorney General Rob Bonta wrote in a July 17 brief. Deputy Attorney General Christopher Beatty, who represented the state's DMV in court, said it would be 'a straightforward case.' He argued that Tesla had for years advertised high-tech features which falsely suggested the cars could drive and park themselves. But attorneys for Tesla insisted the company 'has always made clear' that the cars are not fully autonomous and required 'active driver supervision.'
Tesla has said Autopilot lets vehicles steer, accelerate and brake in their lanes, and Full Self-Driving lets vehicles obey traffic signals and change lanes. But it has admitted that neither excuses drivers from paying attention to the road, and the technologies 'do not make the vehicle autonomous.' DMV investigations Commander Melanie Rosario provided testimony during the first day of proceedings, arguing: 'Autopilot to me means (the car) can drive itself or do things on its own.' But she said she had noticed contradictory statements from Tesla, touting self driving capabilities while simultaneously instructing drivers to keep their hands on or near the steering wheel.
David Marcus, representing Tesla, told the court the complaint is the DMV's latest attempt to block a company 'on the verge of fulfilling the dream' of getting autonomous vehicles on the mass market for public consumption. 'Let me say this very clearly, Tesla has never misled consumers. Never,' Marcus said. Musk and Newsom have clashed over state policies for years, including Newsom's decision to shut Tesla's Fremont factory during the pandemic and California's approval of a bill on transgender kids.
In 2021, Tesla moved its headquarters from California to Texas, and by late 2024, SpaceX and X had followed suit. At the height of Musk and President Trump's bromance, Newsom vowed to introduce a state tax rebate on purchasing electric cars if the Trump administration eliminates the federal tax cut - excluding Musk's Tesla from a piece of the pie. The new rebates could exclude Tesla and other automakers with a large market share in an effort to promote more competition, the governor's office said. But that is subject to negotiation with the state Legislature. Tesla holds 55 percent of California's EV market share, down from 64 percent a year ago. Hyundai and BMW are the next two biggest EV sellers in the state, at just 6.4 percent and 5.5 percent, respectively.
Musk, whose company is the only one that actually manufactures EVs in the Golden State, clearly felt singled out and slammed Newsom's proposal at the time. 'Even though Tesla is the only company who manufactures their EVs in California! This is insane,' he wrote on X. Newsom earlier this year told Musk's nemesis Steve Bannon that California 'created' the billionaire through generous EV mandates. Bannon said 'you know him. You guys created him', prompting Newsom to agree, adding: 'In many respects, California did. Our regulatory process and our subsidies to create this market.' That wasn't the first time Newsom had taken credit for Musk's success. 'It's one of the reasons guys like Elon Musk and others have become so successful,' Newsom said in October. 'It's because we've set price signals, we've created markets, we've created opportunities for investments. We're the number one manufacturer for a reason. We continue to be the envy of the world.'
Tesla in July launched a small group of self-driving taxis in Texas after a several delays, with Musk celebrating the 'robotaxi launch' and social-media influencers posting videos of their first rides. The event marked the first time Tesla cars without human drivers have carried paying riders, a business that Musk sees as crucial to the electric car maker's financial future. He called the moment the 'culmination of a decade of hard work' in a post on his social-media platform X and noted that 'the AI chip and software teams were built from scratch within Tesla.'
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