An employee drives a Tesla Motors Inc. Model S electric automobile, equipped with Autopilot hardware and software, hands-free on a highway.

The National Transportation Safety Board slammed Tesla at a hearing on Tuesday for failure to prevent sometimes deadly misuse of its Autopilot advanced driver assistance systems, which are now standard in the company's electric cars.

The remarks were made at a hearing about a fatal Tesla Model X crash that occurred in 2018 near Mountain View, California, when Apple engineer and game developer Walter Huang was driving with Autopilot engaged, and while using a game app on a work-issued mobile device.

The NTSB said that although Huang was a distracted driver, Tesla's forward collision warning system did not provide an alert, and its automatic emergency braking system did not activate as his Model X SUV with Autopilot switched on accelerated into a highway barrier.

A vice chairman for NTSB, Bruce Landsberg, called Tesla's Autosteer "completely inadequate," during the hearing. Autosteer, a beta feature of Autopilot, is supposed to keep the vehicle in its lane when cruising at highway speeds.

NTSB Chair Robert Sumwalt cautioned drivers, "If you own a car with partial automation, do you not own a self-driving car. So don't pretend you do."

Sumwalt also said that his office had reached out to six automakers in 2017 with recommendations to improve the safety of their semi-autonomous driving systems. Five of them answered to NTSB agreeing to make some improvements, he said. "Sadly, one manufacturer has ignored us, that manufacturer is Tesla."

The agency, which investigates accidents and can make safety recommendations, asks automakers to respond to its recommendations within 90 days. But it had been 881 days since Tesla received the recommendations and failed to reply.

Among other things, the office wants Tesla to improve its driver engagement monitoring systems. Tesla relies on sensing a driver's hands on the steering wheel to know if they are attentive enough to the road while using Autopilot features. Other auto makers use cameras to ascertain whether a driver's eyes are on the road.

The NTSB also called out Huang's employer, Apple, for failing to set a strict policy for its employees banning non-emergency use of mobile devices while driving. Apple told CNBC, "We expect our employees to follow the law."

With iOS 11, or later versions of Apple's operating system, iPhones can understand when a user may be driving and switch off distracting notifications.

The NTSB wants all large employers to implement and enforce strict policies that ban the use of personal electronic devices while driving.

While the NTSB investigates accidents and can make safety recommendations, only its counterpart within the Department of Transportation, NHTSA, can order a recall of vehicle models, parts or systems that they deem defective and unsafe.

Tesla did not immediately reply to a request for comment.

Shares of Tesla were down more than 4% in mid-day trading as the NTSB criticized its Autopilot systems and as coronavirus concerns racked the broader markets.

CNBC reporter Kif Leswing contributed to this report.

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