California's DMV is probing whether Tesla's "self-driving" claims broke state law, the LA Times first reported.
Tesla calls its $10,000 driver-assistance software "full self-driving" - it is not.
Amid a number of Tesla crashes, the technology is coming under increasing scrutiny.
The California Department of Motor Vehicles is looking into whether Tesla illegally misleads consumers with its claims about its "full-self driving" technology, the LA Times reported Monday and Insider confirmed.
"DMV has the matter under review," a DMV spokesperson told Insider. "The [state] regulation prohibits a company from advertising vehicles for sale or lease as autonomous unless the vehicle meets the statutory and regulatory definition of an autonomous vehicle and the company holds a deployment permit."
Tesla did not respond to a request for comment.
Tesla's FSD technology, which customers can add to their vehicles for $10,000, gives the vehicle the capability to change lanes, adjust speed, and complete some other maneuvers without assistance from the driver.
But the company, and specifically CEO Elon Musk, have repeatedly made ambitious promises about FSD's capabilities, only to subsequently push back the timing of new features and tout the claimed safety benefits.
Tesla has faced scrutiny over its driver-assistance features for years. But regulators and lawmakers have been taking an even closer look following Tesla allowing a small group of drivers to test a beta version of its newest FSD features.
The beta sofware has been at the center of several fatal crashes and high-profile traffic violations in recent weeks, prompting inquiries from lawmakers. Yet the company plans to roll out the software more widely even as videos posted by customers continue to show bugs that could pose major risks.
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