• The California state government has passed a bill to incorporate rules to prevent deceptive advertising regarding the autonomous functions of automobiles.

• The bill reportedly directly targets Tesla’s safety and driving assist functions branded “Full self-driving (FSD)” and ‘Autopilot”. Although the terms suggest fully autonomous operations, Tesla’s vehicles are only capable of Level 2 automation (i.e., the vehicles can control both the speed and the steering, but a safety driver must maintain full vigilance).

• Tesla will be required to better advertise and educate consumers on the capabilities and limitations of the two systems, and regulators can take actions as appropriate if the conditions are violated. In the worst-case scenario, regulators have the authority to withdraw Tesla’s license to operate as an auto dealer in California.

• Electric vehicle and clean energy company Tesla offers a suite of advanced driving assistance systems (ADAS) including “Tesla Autopilot,” “Full Self-Driving,” and other safety features, as well as a connected car platform dubbed “EVE for Tesla.” It also provides infotainment services to drivers and plans to venture into the autonomous car market.

<ul><li> Analyst QuickTake: Recently, Wettbewerbszentrale, a self-regulatory institution for German automakers, also filed a lawsuit to ban the use of FSD and Autopilot terms in the country—but was overruled following an appeal by the company. Given the level of scrutiny from regulatory authorities in relation to the use of terms like FSD and Autopilot, it seems likely that Tesla will have to revise its approach to branding and advertising its autonomous vehicles.</ul>