Tesla discontinues Model S, X, shifts focus to Optimus factory
Tesla has announced plans to end production of the Model S and Model X and shift focus to its Optimus robot factory.
Tesla has agreed to stop using the term “Autopilot” in ads for its cars in California to avoid a potential moratorium that could bar it from selling cars in the nation’s most populous state, which is also home to the nation’s largest electric vehicle market.
The California Department of Transportation announced on February 17 that Tesla is following a directive to stop using the term “Autopilot” in marketing its vehicles in the state. The Silicon Valley electric car maker was at risk of having its California dealer and manufacturer licenses required to sell cars in the state suspended for 30 days under the agency’s December 2025 ruling.
The California DMV said Tesla has already amended its use of the term “fully autonomous” to clarify that cars equipped with the system still require human driver supervision.
California DMV Director Steve Gordon said in a statement that the department is “pleased that Tesla has taken the necessary steps to remain compliant with California consumer protections.”
Tesla did not respond to a request for comment.
Why was Tesla being pursued by advertising?
Tesla has long been criticized for promoting its “Autopilot” and “Full Self-Drive” software systems.
Federal and state regulators have accused the company of falsely advertising to consumers that its cars were capable of fully driving themselves.
The California DMV’s lawsuit against Tesla dates back to May 2021. Since 2016, the state has asked Tesla to stop using “Autopilot” in its advertising.
The National Highway Traffic Safety Administration has also launched multiple investigations into the company’s driver-assistance software systems, including an ongoing investigation launched in October over allegations that Teslas in fully self-driving mode violated traffic safety laws. Previous federal investigations also investigated whether Tesla’s Autopilot system may have exacerbated behavioral safety risks for human drivers by compromising the effectiveness of driver supervision.
Other agencies, including the Department of Justice and the Securities and Exchange Commission, had previously investigated Tesla’s advertising practices.
Michael Brooks, executive director of the Washington-based Center for Auto Safety, which advocates for stricter regulations, said in a statement provided to USA TODAY that California’s decision to backtrack on the idea of suspending Tesla’s license is “just the latest evidence that neither federal nor state authorities are able to act in a timely and effective manner” to ensure car buyers are not seduced by “deceptive auto marketing.”
“With no federal effort to address this issue, it took California a decade to demand an obvious solution in the first place, sparing Tesla serious consequences and emboldening other automakers to introduce partial automation without effective safeguards,” Brooks said.
What does Tesla say about its “Autopilot” and “Full Self-Drive” systems?
Tesla has decided to discontinue its Autopilot system, which has been at the center of federal and California investigations for years. The company announced in January that it was moving its Full Self-Drive software to a subscription model.
Critics of the company’s decision pointed out that CEO Elon Musk’s latest compensation package included an operational milestone of 10 million FSD subscriptions.
Tesla says in the instruction manual for Model 3 cars with Full Self-Driving that, “Like other Autopilot features, Full Self-Driving (with Supervision) requires an attentive driver and presents a series of progressive warnings that require driver action.”
“You must remain alert and ready to take over control at any time while Fully Autonomous Driving (Supervised) is engaged,” the company says in the Model 3 manual. “During fully automated driving (with supervision), cameras inside the vehicle monitor the driver’s attentiveness.”
Can Tesla cars be fully self-driving?
The National Highway Traffic Safety Administration classifies autonomous driving into six levels. Telsa’s fully self-driving cars are generally considered capable of Level 2 self-driving, according to the California Learning Resource Network.
“Despite the name ‘Full Self-Driving,’ Tesla FSD is not a Level 5 self-driving system,” the website said in a February 2025 post. “At this time and as of this writing, it is generally considered to be a Level 2 system with advanced capabilities that approximate Level 3, but do not fully meet that requirement.”
Why is California important to Tesla?
California is the largest electric vehicle market in the United States.
More than 26% of new cars sold in California last year were electric models, according to the Automotive Innovation Coalition, which works with most major automakers in Washington. The next state with the highest total was Colorado, with electric vehicles accounting for 23.13% of new vehicle sales, according to the group.
Tesla sold 169,650 electric vehicles in California in 2025, according to the state Energy Commission. According to Cox Automotive, the company sold 589,160 EVs in the U.S. last year.
