According to the Los Angeles Times, the California Vehicle Administration appears to be actively investigating Tesla regarding CEO Elon Musk's bold claims about the company's fully autonomous driving system (FSD).
The news comes about a week after Tesla engineers privately to the California Vehicle Administration admitted that Elon Musk had exaggerated the capabilities of the fully autonomous driving system via social media.
The fully autonomous driving system is a $ 10,000 option for Tesla models and promises to do everything from changing lanes in traffic across highways and taking exits on their own to stopping independently at traffic lights and signs.
However, that doesn't make it fully self-driving, and Tesla cars are currently operating at Level 2 Autonomy, according to the California Vehicle Management Investigators' Autopilot program manager at a March 9th meeting.
And one of the meeting documents says: The driver reaction rate would have to be 1 or 2 million miles per interaction for the driver to move to greater levels of automation.
Tesla noted that Elon Musk extrapolates improvement rates when talking about Level 5 autonomous driving capabilities, and the company was unable to determine whether the rate of improvement could reach Level 5 by the end of the calendar year.
Tesla admits that its cars are not fully self-driving via its website, but this fact has not prevented a number of people from treating these cars as fully self-driving cars, causing many fatal accidents.
California law blames any accidents or damage in the course of doing so directly on those technically behind the wheel.
But the California Vehicle Administration has the power to penalize any car company that misleads its customers under the Lanham Act, also known as the Trademarks Act of 1946.
These sanctions could include either the suspension or complete revocation of Tesla's autonomous vehicle deployment licenses as well as the company's manufacturing and dealer licenses.
For drivers, such a cancellation means that their cars can be removed from the public road by a police officer if he notices that the FSD has been activated.
The problem is the latest in Tesla's long-running series of lawsuits over autonomous driving systems.
The company is currently facing hundreds of lawsuits and nearly two dozen investigations from the National Highway Traffic Safety Administration, and the Federal Trade Commission is looking into allegations against it of fraudulent marketing.