Business
Commentary: Has Musk lied about self-driving Teslas? California says so
Over the years, Elon Musk has been known for making extravagant promises about the capabilities of Tesla cars, and for falling short.
California has finally called him out, via a lawsuit accusing Tesla of leading buyers to believe that its vehicles can operate autonomously — as self-driving cars — which they “could not and cannot do.” That amounts to false advertising, the Department of Motor Vehicles asserts.
The DMV is seeking to bar Tesla from selling cars in the state for at least 30 days. A five-day hearing in the case began Monday in Oakland before a DMV administrative law judge.
Professional investors, and most amateur investors as well, know how to devalue the optimism of corporate executives.
— Tesla, defending its unproven claims for its cars’ self-driving capabilities
A suspension of car sales in California would be a serious problem for Tesla, given that the state has generally accounted for some 30% of its U.S. domestic sales; the U.S. has accounted for roughly half of worldwide sales.
Through June this year, Tesla sales have fallen more than 18% in California compared with the same period a year ago, at least in part because of Musk’s increasingly visible engagement with right-wing politics, his online embrace of racist and antisemitic viewpoints, and the rampage through federal agencies conducted by his minions at DOGE.
Tesla’s EV market share in the state fell to 45.3% in the first half from 53.4% in the first half of 2024.
Tesla’s second-quarter results, released after the stock market’s close Wednesday, bore no reason for joy among investors. The company reported a 12% revenue decline compared with the same quarter in 2024, which it attributed to a decline in auto deliveries, and a 42% decline in operating profit.
Tesla has had to fight accusations of false claims about its cars’ autonomous capabilities before. Indeed, lists of overly optimistic or overconfident forecasts by Musk of Tesla sales and technological capabilities are common on the web. Not a few investors have learned to build in a standard deflation factor to bring these projections closer to reality or plausibility.
“Within two years,” Musk said in 2016, “you’ll be able to summon your car from across the country. It will meet you wherever your phone is … and it will just automatically charge itself along the entire journey.” In 2020, he told an engineering conference that he was “confident that we will have the basic functionality for Level 5 autonomy complete this year.”
Level 5, as defined by the Society of Automotive Engineers, is the highest self-driving category, allowing a vehicle to operate without a human driver ever taking control and in all conditions. No manufacturer has yet turned out a Level 5 vehicle, and some engineers doubt it will ever be possible. The most advanced autonomous vehicles today are Level 2 or 3, in which human drivers must take control all or some of the time.
A video posted on Tesla’s website in 2016 featured a car purportedly stopping at a red light and obeying other traffic signals, with the caption, “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.” A Tesla engineer later testified that the car followed a mapped route and that it did not have the capabilities shown in the video.
A Tesla shareholder lawsuit filed in 2023 cited more than 20 false or misleading statements Musk or Tesla made about the stage of its self-driving technology, its safety and its capabilities, dating back to 2019.
During a podcast that year, for example, Musk claimed that by the end of the year a Tesla car “will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention … I’m certain of that. That is not a question mark.” The California authorities assert that that’s still not possible, in 2025.
Tesla’s defense in the shareholder case included the argument that statements like those were “mere corporate puffery, vague statements of optimism.” They shouldn’t be part of a lawsuit, the company said, because “professional investors, and most amateur investors as well, know how to devalue the optimism of corporate executives.”
We’ve heard the “puffery” defense before. Typically, businesses use it to defend against charges that its advertising claims are deceptive, on the grounds that no one believes advertisements anyway.
Wells Fargo used it in an attempt to fend off a 2018 shareholder lawsuit alleging that the bank’s claim that it was working to “restore trust” among its customers after a string of scandals was false. The bank’s response was that such statements were “puffery” — so generic that they couldn’t “cause a reasonable investor to rely upon them.” Wells Fargo eventually settled the lawsuit for $300 million, without admitting wrongdoing.
A federal judge dismissed the shareholder lawsuit last year, finding that some of the statements by Tesla and Musk were indeed mere “puffery” and others were either true or otherwise irrelevant. The plaintiffs, which are public pension funds, have appealed the dismissal.
California authorities filed their case against Tesla in July 2022. Their accusation has four main components. They argue that by labeling its autonomous driving functions “Autopilot” and “Full Self-Driving Capability,” the company has implied to customers that the cars can drive themselves.
The state also cited two snippets of language on the Tesla website. One stated, “The system is designed to be able to conduct short and long-distance trips with no action required by the person in the driver’s seat.” The other said, in part, “All you will need to do is get in and tell your car where to go. … Your Tesla will figure out the optimal route, navigating urban streets, complex intersections and freeways.”
Tesla didn’t reply to my request for a comment. But in its trial brief, filed July 17, the company asserted that its Autopilot and Full Self-Driving descriptions have always been qualified by warnings to users that the available features “require active driver supervision and do not make the vehicle autonomous.” It said that more than a year ago it dropped the label “Full Self-Driving Capability,” or FSDC, and replaced it with “Full Self-Driving (Supervised).”
As for the language the state cited, Tesla said that the phrases appeared only on “an aspirational webpage designed to recruit engineers … to develop future FSDC features,” and weren’t aimed at buyers — in other words, they were not meant to be factual claims. In any case, Tesla said, that webpage “no longer exists.” Its web address now steers users to the webpage for Full Self-Driving (Supervised).
Tesla also contended that there is no “direct evidence of consumer confusion” over the autonomy of its vehicles. The DMV, it said, merely concluded that “consumers may interpret Autopilot of FSDC terminology as being synonymous” with autonomous operation, but that’s not enough for a false advertising claim. (Emphasis in the original.)
It’s true that Tesla’s self-driving features haven’t been successfully blamed in court for producing injuries or fatalities; Tesla has settled at least three cases involving claims that its self-driving systems were responsible for fatal accidents. One case involved the death of an Apple engineer whose Tesla struck a highway barrier while he was playing a video game with Autopilot allegedly activated. The settlement terms were undisclosed.
Tesla’s record could change, however, with the outcome of a trial currently taking place in federal court in Miami. The case was brought by the families of two victims who died when a Tesla with Autopilot engaged slammed into an SUV near where they were standing. One died and the other suffered serious injuries. The driver of the Tesla had taken his eyes off the road to search for a cellphone he had dropped, and the vehicle continued through an intersection before striking the SUV.
In certifying the case for trial, federal Judge Beth Bloom ruled that “a reasonable jury could find that Tesla acted in reckless disregard of human life for the sake of developing their product and maximizing profit.” She also cleared the plaintiffs to seek punitive damages if the jury finds against Tesla.
These legal developments come at a sensitive moment for Tesla. Sales are down not only in California, but also in much of the world. In the European Union, Tesla sales fell 45.2% this year through May, compared with a year earlier.
Tesla’s sales of regulatory credits to automakers that don’t exclusively market EVs but have needed to meet federal fleet emission standards are likely to evaporate; the budget bill recently signed by President Trump eliminates the financial penalties for automakers that don’t meet those standards, removing their incentive to buy credits from Tesla.
Sales of those credits came to $2.76 billion last year, nearly 40% of Tesla’s reported profit for the year. Without the credit sales, which came to $595 million in the first quarter of this year, which ended March 31, Tesla would have reported a loss for the quarter instead of a $420-million profit. Tesla is scheduled to report second-quarter financial results next week.
The company faces challenges other than Musk’s waning public esteem and its sales decline. As I reported in March, the company faces ever-stiffer secular headwinds, including competition from legacy automakers moving into the electric vehicle market.
Its reputation for cutting-edge technology is eroding; the company’s largest Chinese rival, BYD, recently announced a new charging technology it says can add about 250 miles of range to an EV in five minutes — even less than the time it takes to fill a conventional car’s gas tank to the same level. Tesla says its top-of-the-line superchargers need 15 minutes to add 200 miles of charge.
Tesla’s product lineup is looking increasingly antique. Its clunky and widely disdained Cybertruck is beginning to look like a lemon. In March, regulators ordered a recall of all the trucks — the eighth recall since its introduction in 2023 — this time to address the tendency of metal trims along both sides to get ripped off at highway speeds because the glue that attaches them fails.
Sales have been sinking: Kelley Blue Book reported earlier this month that Tesla sold only 4,306 Cybertrucks in the second quarter this year, down by nearly one-third from the second quarter of 2024, and down by 50% in the first half of 2025 compared with last year’s first half.
Tesla’s stock has long been buoyed by Musk’s reputation as a farsighted entrepreneur — based in part on his enticing visions of Tesla’s prospects. Those are beginning to fray, and the full dimensions of the wear-and-tear may not yet be fully evident.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
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