Tesla failed to dismiss the claims of the California Department of Motor Vehicles, which accused the automaker led by Elon Musk of exaggerating the self-driving capabilities of its cars. This was reported by Reuters.

California Administrative Judge Juliet Cox rejected the company’s attempts. According to her decision, the Department’s accusations, if confirmed, will be the basis for the enforcement of penalties against Tesla.

In July 2022, the California Department of Motor Vehicles accused Tesla of misleading consumers about cars with autopilot and full self-driving technology. The regulator stated that the cars “could not operate as autonomous vehicles either at the time of the advertisement or now”.

The department has been seeking legal remedies that could include suspending Tesla’s license to sell cars in California and requiring the manufacturer to compensate vehicle owners.

Neither Tesla nor its lawyers have yet responded to requests for comment. The Department of Motor Vehicles declined to comment on the judge’s decision, but said its claims would be formally heard by the Office of Administrative Hearings on September 9.

California is Tesla’s largest market in the United States. But year-on-year sales have been falling for two quarters in a row. Tesla’s market share of electric vehicles in the state fell to 55.4% in the first quarter from 61.8% a year ago.