An Optimus robot in front of a Cybertruck in Alameda, California, on August 23.
Anadolu via Getty Images
Tesla shareholders just overwhelmingly supported CEO Elon Musk’s unprecedented pay package that might be value $1 trillion over a decade, however the engineers who lead the corporate’s key vehicle programs, for its best-selling Model Y, Model 3 and the controversial Cybertruck, aren’t sticking around to see how things play out.
Emmanuel Lamacchia, an eight-year Tesla veteran and program manager for the Model Y, said in an announcement late Sunday LinkedIn post that he can be leaving the Austin-based company. His announcement got here just hours after an analogous post from Siddhant Awasthi, one other eight-year veteran who led the Model 3 and Cybertruck programs. Neither gave reasons for his or her decisions, but each mentioned recent profession moves but didn’t elaborate.
They are only the newest high-profile engineers to depart the corporate as Musk seeks to shake up Tesla’s business by prioritizing AI-powered corporations — namely robotaxis and humanoid robots — that do not currently generate revenue, slightly than selling more electric vehicles, batteries and charging services that do. Earlier this 12 months, Musk fired the corporate’s head of production and sales in North America and Europe. In August the Director of Tesla’s battery team left the corporate, as did the Head of his former supercomputer team “Dojo”. And Vice President of North American Sales and repair. Even the top of Musk’s much-touted “Optimus” robot project, which the billionaire said last week was likely Tesla’s biggest recent business, terminated in June.
“There are no new models in sight. The focus is only on cost reduction.”
Apart from the indisputable fact that the poorly sold, much-derided Cybertruck is one in every of the largest failures within the automotive industry. Musk’s prioritization of non-electric vehicle businesses is making the corporate less attractive to auto engineers, in accordance with a former Tesla executive.
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“Imagine you’re someone who worked in the automotive industry or is studying engineering at university and you go to Tesla and there are no new models in sight. The focus is just on cutting costs,” said the person, who didn’t wish to be named. “It’s not exciting at all. They can’t attract the best people in the automotive industry.”
The recent departures haven’t unsettled shareholders. Tesla rose 3.7% to $445.23 in Nasdaq trading on Monday.
Despite a surge in third-quarter deliveries driven by U.S. customers rushing to purchase before federal tax credits expire after Sept. 30, Tesla’s electric vehicle sales have fallen about 6% to this point this 12 months. Although the corporate has released cheaper versions of the Model Y and three, its top global sellers, lack of recent products and the slower pace of electrical automotive sales within the US and Europe suggest that automotive sales will proceed to say no in the following few quarters.
Last week, Musk suggested that Tesla’s two-door Cybercab will launch within the second quarter of 2026. However, this automotive shall be sold with no steering wheel and standard controls and can function exclusively as a self-driving vehicle. That’s of venture, nonetheless, considering the corporate continues to struggle to prove it’s on par with Alphabet’s Waymo in mastering autonomous driving.
Ross Gerber, a Tesla investor and critic of Musk’s strategy shift, thinks it might be higher to easily launch Cybercab as a so-called Model 2, “just a regular electric vehicle that they could sell for about $30,000,” he told Forbes.
“The thing about the way car companies work is that people want new models and new features and they want new designs for their car that are not too different from the original but are different,” said Gerber, CEO of Gerber Kawasaki, which manages about $4 billion, including $80 million in Tesla shares. “Tesla behaved differently than every other car manufacturer. They just refreshed the Model Y and said, ‘Okay, we refreshed the car. We did it better and made the Model 3 better.’ But it’s not a new model, and that’s the problem.”
Participants at a protest in Austin against Tesla’s proposed $1 trillion compensation plan for CEO Elon Musk.
The Austin American-Statesman via Getty Images
Sales of the Cybertruck, which Musk once claimed would sell a whole bunch of 1000’s of units annually, are already falling within the model’s second full 12 months, falling 38% within the third quarter to just below 38% 16,097 units. Aside from its polarizing design, the truck has also been subject to several recalls, most recently announced last month.
Although Tesla is preparing to finally start selling its electric semi-truck in 2026, Musk says that model will likely only add tens of 1000’s of recent sales to the underside line, given how much smaller the Class 8 semi-truck industry is in comparison with the broader passenger automotive market.
Tesla says it has the capability to provide no less than 2 million vehicles annually at factories in California, Texas, China and Germany. That is significantly greater than is currently needed. Annual sales are expected to be between 1.5 and 1.6 million this 12 months. At last week’s shareholder meeting, where no less than 75% of investors voted to award Musk $1 trillion in shares over a decade if he achieves a series of economic and strategic goals, the billionaire indicated that he would likely absorb a few of that surplus by making robots.
“We have to invent entirely new terms for the key man risk involved here.”
The company is constructing a “million-unit production line” in Fremont to make Optimus, Musk said. At some point there may also be a “10 million units per year line” on the Austin, Texas, factory, which now builds Cybertrucks and Model Ys. However, just like its Robotaxi and Cybercab plans, Tesla’s ability to construct and sell tens of millions of Optimus units is determined by making the technology practical and inexpensive, which has not yet happened.
The departures of Lamacchia and Awasthi also highlight a persistent problem that Tesla’s board appears bored with solving: the shortage of a robust leadership team and a transparent succession plan for the post-Musk era. Aside from the CFO, Tesla’s C-suite currently has no president, COO or executive vice chairman, or officials with titles higher than senior vice chairman.
Currently, the Tesla board is betting every part on him with its strong promotion of Musk’s compensation package.
“I can’t imagine a scenario where Tesla’s valuation doesn’t collapse after Elon Musk’s departure,” said Gautam Mukunda, a professor on the Yale School of Management. “We need to invent entirely new terms for the key man risk involved here. Normal key man risk doesn’t even apply – and especially not when you’re talking to someone who says they engage in remarkably risky behavior.”
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