California Kills Tesla’s Autopilot After Judge Rules ‘Intentional Deception’—$243M Verdict Upheld

Tesla’s Autopilot era is officially over and not everyone is sad to see it go. After a decade of bold promises and controversial marketing, two massive legal blows landed back-to-back in early 2026, and they’ve changed everything. First, California’s DMV forced Tesla to ditch the “Autopilot” name entirely. Then, a federal judge backed a $243 million jury verdict in the first-ever fatal Autopilot wrongful-death case decided by a jury.

For years, critics warned that Tesla’s branding gave drivers a false sense of security. Now, courts and regulators are saying the same thing, loud and clear.

California Says Autopilot Marketing Broke the Rules

In December 2025, the California DMV made it official that Tesla’s use of the word “Autopilot” to market its driver-assistance features was misleading and broke state law. An administrative law judge had originally recommended suspending both Tesla’s manufacturing and dealer licenses for 30 days, which would have been a nightmare in Tesla’s biggest U.S. market.

The DMV softened the blow a bit, permanently staying the manufacturing license suspension but giving Tesla a hard 60-day deadline. They have to stop using the Autopilot name, or lose their ability to sell cars in California.

Tesla Kills the Autopilot Name to Keep Selling Cars

Faced with losing its California sales privileges, Tesla did what it had to do. On February 17, 2026, the California DMV confirmed that Tesla successfully took the required action to stop using the term ‘Autopilot’ in the marketing of its vehicles in California. Just like that, a brand name that had defined Tesla’s tech identity for a decade was gone.

By dropping the name, Tesla dodged what would have been an unprecedented dealer and manufacturer license suspension. But the damage to its reputation? That’s harder to undo.

Federal Judge Backs the $243 Million Verdict

Three days after the Autopilot name died, another hammer dropped. On February 20, 2026, U.S. District Judge Beth Bloom in Miami refused to overturn a massive $243 million jury verdict against Tesla. The case involved a deadly 2019 crash with an Autopilot-equipped Model S.

This is the first time a federal jury had ever held Tesla partially responsible in a fatal Autopilot crash. The original verdict came in August 2025, and Tesla fought hard to get it thrown out. Needless to say, they lost.

The 2019 Florida Crash That Started It All

In 2019, driver George McGee was cruising through the Florida Keys with Autopilot engaged when he dropped his phone. He lost focus and his Model S blew through a stop sign and a flashing red light at a T-intersection, slamming into a parked Chevrolet Tahoe. The crash killed 22-year-old Naibel Benavides Leon and left her boyfriend, Dillon Angulo, with injuries he’ll carry for life.

Here’s what’s interesting, data from the Tesla showed the car actually sped up from 44 to 62 mph in the seconds before impact. Neither the driver nor Autopilot hit the brakes in time.

A Decade of Misleading Marketing Finally Catches Up

California’s administrative law judge didn’t beat around the bush about Tesla’s advertising playbook. The ruling stated that Tesla’s marketing follows a long but unlawful tradition of intentionally using ambiguity to mislead consumers”about what Autopilot could actually do. This is what a lot of people don’t fully understand, Autopilot is classified as SAE Level 2 technology.

That means the driver must stay fully engaged and keep their hands on the wheel at all times. But the name Autopilot suggested something far more advanced, like the car could handle things on its own. Tesla also had to rebrand Full Self-Driving by adding the word supervised after similar criticism.

Elon Musk’s Long Trail of Broken Autonomy Promises

Elon Musk has been promising self-driving Teslas for over a decade and the goalposts keep moving. Back in 2015, he said Tesla vehicles would drive themselves within two to three years. A cross-country autonomous drive was promised by 2017, then pushed to 2018, then quietly shelved. By 2023, even Musk seemed to acknowledge the pattern, calling himself the boy who cried FSD during a public event.

It was a rare moment of self-awareness, but it didn’t slow down the hype machine. As of early 2026, Tesla’s Full Self-Driving system still requires a human driver paying attention at all times. Musk has now shifted the target again, saying the company needs 10 billion miles of driving data before unsupervised autonomy becomes possible and that milestone is still far away.

Tesla Moves FSD to a $99-a-Month Subscription Only

On January 14, 2026, Musk announced that Tesla would kill the one-time purchase option for Full Self-Driving and move entirely to a $99-per-month subscription. The timing raised eyebrows because this business shift came just weeks before the Autopilot brand was officially scrapped. Tesla’s updated FSD terms also include a clause saying the company can change the price and features whenever it wants.

But the real gut punch for existing owners? Tesla quietly removed Autosteer, a feature that had been included standard with every car under the Autopilot umbrella, and locked it behind the FSD subscription paywall. That means drivers who’d been using Autosteer for free suddenly needed to pay monthly to keep it.

Over 2 Million Teslas Recalled Over Safety Concerns

The pressure on Tesla goes way beyond California courtrooms. In December 2023, Tesla issued its biggest recall ever, covering more than 2 million vehicles, essentially every Tesla sold in the U.S. since Autopilot launched in 2015. The reason? NHTSA determined that the driver-monitoring system was inadequate and can lead to foreseeable misuse of the system.

Tesla pushed out an over-the-air software update to address the issue, but the fix didn’t end the story. NHTSA opened a follow-up investigation after 20 more crashes were reported in vehicles that had already received the update. Since 2016, NHTSA investigators have been dispatched to at least 35 Tesla crashes where automated systems were suspected of being active.

Tesla Sues California, Refusing to Go Quietly

Tesla isn’t just accepting the regulatory smackdown. In February 2026, the company filed a lawsuit against the California DMV, seeking to overturn the false advertising ruling entirely. Even after complying with the branding changes, Tesla is escalating its fight with regulators, arguing the DMV’s decision should be reversed. The company is also widely expected to appeal the $243 million verdict to a higher court.

Tesla’s legal team has maintained that driver George McGee should bear sole responsibility for the crash and that automakers shouldn’t be on the hook for damages caused by negligent drivers. It’s a bold legal strategy, but it puts Tesla in an uncomfortable position, simultaneously dropping the Autopilot name and arguing there was nothing wrong with it.

Sources:

California DMV, “Tesla Takes Corrective Action to Avoid DMV Suspension,” February 18, 2026
Reuters, “US Judge Upholds $243 Million Verdict Against Tesla Over Fatal Autopilot Crash,” February 20, 2026
NPR, “Tesla Recalls 2 Million Vehicles Over Autopilot Monitoring,” December 12, 2023
CNBC, “Tesla Loses Bid to Toss $243 Million Verdict in Fatal Autopilot Crash Suit,” February 20, 2026
PCMag, “Tesla’s New FSD Terms Say It Can Change the Price and Features at Any Time,” February 20, 2026