The ad, which ran in Norwegian newspaper Dagbladet, claimed that the engine in the new Lexus LS500h "works on the principle of perpetual motion" and is "self-charging," meaning it does not need to be plugged in to an external power source.
The Norwegian Consumer Council, which is the country's advertising watchdog, said the ad was "misleading" and ordered Lexus to remove it.
"The term 'perpetual motion' is used in physics to describe a hypothetical situation where an object continues to move forever without any outside input of energy," the Consumer Council said in a statement.
"In real life, there is no such thing as a perpetual motion machine."
The Consumer Council said the ad violated two clauses of the Norwegian Marketing Practices Act, which prohibit misleading advertising and marketing that could cause "fear or misunderstanding."
Lexus has not commented on the decision.