Tesla’s shares fell as much as 2.2% in after-hours trading on Tuesday after the head of California’s Department of Motor Vehicles said the electric-vehicle maker could face a 30-day suspension of vehicle sales in the state.
The potential penalty stems from allegations that Tesla misled consumers about the capabilities of its driver-assistance technology, the DMV official said. The agency is reviewing whether the company’s marketing and disclosures accurately reflect the systems’ functionality and limitations.
A decision has not yet been finalized, the official added. Tesla did not immediately respond to a request for comment.

