The California Department of Motor Vehicles has accusedTesla of engaging in deceptive practices around the marketing of its driver assistance systems, which are branded autopilot and full self driving in the U.S.
In a worst-case scenario, the company could lose its licenses to manufacture and sell cars in California.
An official and attorneys for the Department of Motor Vehicles made a pair of filings with the Office of Administrative Hearings.
The autopilot and full self-driving capability labels and descriptions represent that vehicles equipped with the ADAS features will operate as an autonomously driving vehicle, but vehicles equipped with those features could not be advertised at the time.
In an email to CNBC, the deputy director for the Office of Public Affairs of the California Department of Motor Vehicles said that if the department prevails, it will ask that Tesla be required to advertise to consumers and better educate drivers about the capabilities of its 'Autopilot' and 'Full Self'
Gore noted that the action relates to the marketing and advertising practices of the company. The California Department of Motor Vehicles is looking at the design and technological capabilities of the cars to see if they can be used on public roads.
Gore said that the Department of Motor Vehicles wanted to prevent driver misunderstanding and misuse of new vehicle technologies.
The Los Angeles Times was the first to report on the filing.
The administrative court has fifteen days to give a response to the accusations against the company.
The premium Full Self Driving option is available for $12k up-front or for $199 a month. Some of the premium features are included in the Enhanced Autopilot option.
Drivers can try out unfinished driver assistance features on public roads in the U.S. through a program called Full Self DrivingBeta.
Only owners of the company's premium system can take part in the program. The high driver safety score that owners must obtain is determined by the software that monitors their driving. More than 100,000 drivers in the U.S. have access to the company's free service.
The National Highway Traffic Safety Administration requires automakers to report crashes involving advanced driver assist systems.
According to federal figures released in early July, more than 270 crashes involving these systems were reported by the end of the year. The data isn't meant to show which systems are safest.
At least 37 special crash investigations have been initiated by NHTSA into crashes where the company's driver assistance systems were believed to be a factor. There were at least 17 deaths that resulted from those crashes.
After a string of crashes in which emergency responders were struck by vehicles that were standing still, the NHTSA opened an evaluation of the autopilot technology of the electric car maker.
Here and here, you can read the California Department of Motor Vehicles' formal accusations againstTesla.
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