Tesla is facing growing scrutiny over how it markets its Full Self-Driving (FSD) software in Europe, where regulators have questioned whether the name accurately reflects the technology’s capabilities. German authorities described the original branding as “somewhat misleading,” arguing that it could give drivers an exaggerated impression of the system’s autonomy.

Despite its name, FSD remains a driver-assistance system that requires drivers to stay attentive and ready to take control.

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Regulatory Pressure Drives A Branding Shift

Germany’s Federal Ministry of Transport said the FSD name suggested a level of autonomy the software does not provide. The dispute highlights the tension between automakers’ marketing ambitions and regulators’ efforts to ensure that product names reflect actual capabilities.

In the United States, Tesla continues to offer the package as Full Self-Driving (Supervised), with a subscription priced at $99 per month. In Europe, its expansion depends on regulatory approval across multiple markets, making compliance and product descriptions increasingly important.

Europe Is Key To Tesla’s Autonomy Plans

Tesla has pushed European regulators, particularly in the Netherlands, to accelerate approval of its advanced driver-assistance software. Europe is an important market for the company as electric vehicle demand improves in parts of the region and Tesla seeks to recover from a previous sales downturn.

However, the approval process has attracted criticism. Reuters has reported that Tesla’s lobbying efforts have, in some cases, led regulators to reduce the intensity of safety testing and reviews, raising questions about the balance between commercial interests and public oversight.

U.S. Investigations Add To Safety Concerns

Tesla’s FSD system is also under investigation in the United States. The National Highway Traffic Safety Administration is examining its performance in conditions including fog and intense sunlight, as well as whether the software has contributed to traffic violations and collisions.

Legal challenges have added to the pressure. In December 2025, a California judge found that Tesla had engaged in deceptive marketing by implying that Autopilot and FSD were fully automated. Tesla has since countersued the California Department of Motor Vehicles in an effort to overturn the state’s “false advertiser” designation. The case remains pending.

Experts Question Transparency Of Approvals

Missy Cummings, an autonomous systems expert and engineering professor at George Mason University, argued that changing the branding does little to resolve the underlying safety concerns. In comments to CNBC, she questioned whether European regulators were adequately considering ongoing U.S. investigations into Tesla’s software.

“The EU is struggling to keep up in the AI marketplace,” Cummings said. “Musk sees this and is definitely bullying them as a result.”

She also criticised the Dutch vehicle regulator, RDW, for approving FSD in Europe based on what she described as “secretive data,” arguing that the public should have greater transparency around approvals for AI-powered transportation systems.

Tesla and RDW did not immediately respond to requests for comment.

Tesla Reports 1.48 Million Active FSD Subscriptions

In its second-quarter earnings update, Tesla reported 1.48 million active FSD subscriptions but did not disclose how many involved free trials or promotional offers. The omission makes it difficult to assess the product’s paid adoption accurately.

As autonomy remains an important part of Tesla’s long-term business strategy, the company faces challenges extending beyond technology development. Regulators are scrutinising both the software’s safety and the claims used to market it, keeping questions about capability, oversight and consumer trust at the centre of the debate.