This article first appeared on GuruFocus.
Tesla (TSLA, Financials) may face a 30-day suspension of car sales in California after authorities concluded it may have deceived buyers about its driver-assistance technologies, Bloomberg reported .An administrative court found Tesla dishonest in its Autopilot and Full Self-Driving marketing, recommending the penalty. The chairman of the California Department of Motor Vehicles told Bloomberg that the suggestion is being reviewed.
Tesla would have at least 90 days to complete regulatory criteria and resolve issues before any suspension. Tesla’s domestic sales projection is affected by the result in California, one of its main markets.Tesla shares plummeted over 1% after-hours after the story. The stock set a record high on anticipation about the company’s robotaxi and autonomous driving future.
In recent years, safety agencies and consumer activists have questioned Tesla’s driver-assistance promises, which may overestimate system capabilities. The corporation has said that its innovations need active driver supervision.Investors will scrutinize Tesla’s regulator reaction and its influence on sales, brand reputation, and autonomous driving strategy.