Tesla's claims about its autopilot assist function are misleading, a German court said.
The use of the word "autopilot", along with other marketing materials, suggested that the vehicle could drive on its own, the court said.
But technology still requires that the driver remain alert at all times.
Tesla was forbidden to repeat misleading claims. German law does not allow completely autonomous driving.
The German Wettbewerbszentrale of fair competition contested the Tesla website by promising, in July 2019, "full potential for autonomous driving", including automatic driving on motorways.
Under the heading "by the end of the year", Tesla added that his cars would be able to recognize traffic lights and stop automatically and start driving in urban areas.
The Munich court said: "Using the term" autopilot "and other words, the defendant suggests that their vehicles are technically capable of driving completely autonomously."
In 2018, two US consumer groups also complained of the "misleading and misleading" designation of the Autopilot feature.
Tesla's strong position in the electric vehicle market has made it a challenger for German automakers.
And he chose Berlin as the site of his first large European factory.
"Typically bold"
Responding to a tweet that points out the pilots don't stop working when the plane's autopilot mode is active, CEO Elon Musk tweeted: "Tesla's autopilot was literally named after the term used in the aviation industry.
"Also, what about" autobahn "?" he added, referring to the German word for highway.
"Auto" is a German word for automobile, similar to the English word "automobile".
Last week, Musk said that fully autonomous driving is "very close" and Tesla would have broken technology by the end of this year - a request that an analyst called "typically bold".
Police car
There have been several examples of drivers who have abused the autopilot system in dangerous circumstances.
A British driver was expelled from driving for 18 months after turning on the system and getting into the passenger seat on the highway.
Earlier this year, investigators claimed that another Tesla driver, who died in an accident in March 2018, was playing a video game when his autopilot-enabled car hit a concrete barrier.
They also warned that other crashes could occur if Tesla didn't change the system.
And in another case, a Tesla in autopilot crashed into a stationary police car.
