Tesla Inc. is set to face off with the California Department of Motor Vehicles over claims that the company has exaggerated the capabilities of its Autopilot and Full Self-Driving technology and misled consumers.

Tesla reported Wednesday that both revenue and profits fell in the second quarter of 2025 compared to a year earlier.

Elon Musk made this statement during the Tesla Q2 2025 earnings call that came alongside its earnings results this week. The robotaxi service has been made available in limited capacity in Austin, Texas,

Auto policies have been in flux during the second Trump administration. Tesla, and the rest of the industry, will lose the $7,500 purchase tax credit at the end of September. Just as important, changing emissions standards will lower Tesla’s zero-emissions credit sales,

Tesla is fighting cases in Miami and California alleging it dangerously misled consumers about its Autopilot technology, including the driver in a fatal crash.