Tesla's Autopilot partial self-driving system had flaws that caused cars to steer erratically when engaged, a lawsuit filed yesterday claims.
The electric automaker had also failed to deliver promised safety feature improvements as quickly as it should, it added.
"Autopilot capabilities that consumers paid $5,000 extra to obtain are anything but 'safer' and 'stress free,' " alleges the lawsuit on behalf of three Tesla owners. "Many owners report the Autopilot is essentially unusable and demonstrably dangerous."
The suit, filed in US District Court in San Jose, California sought class-action status.
Palo Alto, California-based Tesla responded saying the lawsuit contained factual errors and was ''a disingenuous attempt to secure attorney's fees posing as a legitimate legal action.''
Tesla CEO Elon Musk had claimed that the company's Autopilot system was among the most advanced, relying on a network of sensors and radar to help keep the car in its lane.
It could also brake and speed up with traffic and even change lanes on its own.
However, according to the suit, Autopilot and other safety systems had not lived up to the claims. It added, owners were told systems like automatic braking and collision avoidance would be flashed to cars via over-the-air updates by December, but the updates had not arrived as planned.
Meanwhile, Tesla Inc and the former head of its Autopilot program, had settled a lawsuit brought by the electric vehicle maker in January, the parties said yesterday, in a deal that would bar the former executive from recruiting Tesla employees for a year.
There was no acceptance of wrongdoing by both sides under the terms of the agreement, Reuters which claimed to have seen the document, reported.
Tesla had brought a lawsuit against Sterling Anderson, the non-technical program manager of Tesla's Autopilot semi-autonomous driving system, in which Anderson was accused of trying to recruit Tesla engineers for his new venture, Aurora Innovation, prior to leaving the company.