The principal has recommended that my son be expelled from school because he is repeatedly late for his first class. Can she do that?

Yes, but it seems like a desperate and unfortunate solution. According to Section 48915 of California Education Code, expulsions should be reserved for offenses where the student presents a continuing danger to himself or others:

An administrator may also expel a student when other means of correction are not feasible or have not brought about the desired conduct. While this might include tardiness, I question how expulsion addresses the problem.

In terms of what to do next, it depends how far the process has gone. If the recommendation is sitting on the principal's desk, then you, your son, and the principal need to develop a plan to address the issue. If the county office of education has received the expulsion request, then you need to prepare your arguments for the expulsion hearing. Expulsions are a serious matter and many families bring an attorney or an advocate to these hearings. You will want to demonstrate that tardiness does not pose a danger to your son or others, and that the school has not exhausted other solutions to the problem. It would help if you and your son could suggest other strategies.