Being labelled as "false advertising" is not something Tesla can accept according to CNBC who ruled that Tesla's claims of self-driving cars are false, and those have categorised Tesla as a false advertiser, something that will now be taken to the legal system.
While this sounds rather harmless, the problem is that false advertising the capabilities of your car can in fact result in your license to produce cars being revoked, this includes selling the cars produced, and the DMV has already threatened to do so, albeit temporarily, if the marketing language is not changed.
The disagreement comes down to the DMV not finding an autopilot system, and Teslas FSD ("Full Self-Driving (Supervised)") system to be of equal worth in terms of a fully self-driving car. The problem arises due to the manuals for Tesla vehicles stating clearly that FSD should not be used without the driver paying attention, while the company already in 2018 started public talking about a fully self-driving experience, with automated cars being the final goal, and lots of test drives taking place.
In short, the cars cannot operate autonomously as suggested by the marketing material. This comes on top of lawsuits where customers were promised software upgrades that would allow their Tesla to become a "robotaxi", something that has not happened yet, as well as at least one lawsuit resulting from a driver being killed in a car crash where a Tesla owner thought the autopilot would stop him from ramming another car while he reached for a phone.