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Tesla Faces Possible Sales Suspension in California Over Driver-Assistance Claims

Dec 16, 2025, 11:51 p.m. ET

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.

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