Tesla shareholders just overwhelmingly backed CEO Elon Musk’s unprecedented pay package that could be worth $1 trillion over a decade, but engineers running the company’s main vehicle programs, for its top-selling Model Y, Model 3 and the controversial Cybertruck, aren’t sticking around to see how things turn out.
Emmanuel Lamacchia, an eight-year Tesla veteran and program manager for the Model Y, said late Sunday in a LinkedIn post that he was leaving the Austin-based company. His announcement came just a few hours after a similar post by Siddhant Awasthi, another eight-year veteran who ran the Model 3 and Cybertruck programs. Neither gave reasons for their decisions, though both mentioned new career steps, which they didn’t detail.
They’re just the latest high-profile engineers to leave as Musk seeks to shake up Tesla’s business, prioritizing AI-powered businesses – namely robotaxis and humanoid robots – that don’t generate revenue currently, rather than selling more electric vehicles, batteries and charging services, which do. Earlier this year, Musk fired the company’s head of manufacturing and sales in North America and Europe. In August, the director of Tesla’s battery team left the company, as did the head of its former “Dojo” supercomputer team and vice president of North American sales and service. Even Musk’s much-hyped “Optimus” robot project, which the billionaire said last week is likely to be Tesla’s biggest new business, quit in June.
Aside from the fact that the poor-selling, much-derided Cybertruck ranks among the auto industry’s biggest flops, Musk’s prioritization of non-EV businesses is making the company less attractive to auto engineers, according to a former Tesla executive.
“Imagine you’re someone who’s been working in the automotive industry or studying engineering at university and you go to Tesla and there are no new models on the horizon. There’s just a focus on cost reduction,” said the person, who asked not to be named. “This isn’t exciting at all. They cannot be attracting the best people in the automotive industry.”
The most recent departures didn’t ruffle shareholders. Tesla rose 3.7% to $445.23 in Nasdaq trading on Monday.
Despite a spike in deliveries in the third quarter, the result of U.S. customers rushing to buy before federal tax credits phased out after Sept. 30, Tesla’s EV sales are down about 6% so far this year. Though the company has come out with cheaper versions of Model Y and 3, its global top sellers, its lack of new products and the slower pace of EV sales in the U.S. and Europe suggest the next few quarters will see a continued drop in its auto sales.
Last week, Musk suggested that Tesla’s two-door Cybercab will arrive by the second quarter of 2026. But that car is intended to be sold without a steering wheel and standard controls, operating exclusively as a self-driving vehicle. That’s a gamble, though, given that the company continues to struggle to prove it’s equaled Alphabet’s Waymo in mastering autonomous driving.
Ross Gerber, a Tesla investor and critic of Musk’s shift in strategy, thinks it would be better to simply release Cybercab as the so-called Model 2, “just a regular EV that they could sell for about $30,000,” he told Forbes.
“The thing about how car companies work is people want new models, new features and they want new designs for their car that’s not too different than the original, but is different,” said Gerber, CEO of Gerber Kawasaki, which manages about $4 billion, including $80 million of Tesla shares. “Tesla has acted unlike any car company. They just refreshed the model Y and said, ‘Okay, we refreshed the car. We made it better and made the Model 3 better.’ But it’s not a new model, and that’s the problem.”
Sales of the Cybertruck, which Musk once claimed would sell hundreds of thousands of units annually, are already dropping in the model’s second full year, down 38% through the third quarter to just 16,097 units. Aside from its polarizing styling, the truck has also had multiple recalls, the most recent announced last month.
Though Tesla is preparing to finally start selling its electric semi truck in 2026, according to Musk, that model is likely to only add tens of thousands of new sales to the bottom line, given how much smaller the Class-8 semi industry is compared to the broader passenger vehicle market.
Tesla claims to have the capacity to produce at least 2 million vehicles annually at plants in California, Texas, China and Germany. That’s considerably more than it needs at the moment, with annual sales likely to come in between 1.5 million and 1.6 million this year. At last week’s shareholder meeting, in which at least 75% of investors voted in favor of awarding Musk $1 trillion of stock over a decade if he hits a series of financial and strategic goals, the billionaire hinted it’s likely to absorb some of that surplus by making robots.
The company is building a “million-unit production line in Fremont,” to make Optimus, Musk said. At some point, it will also add a “10 million unit per year line” at the Austin, Texas, plant that now builds Cybertrucks and Model Ys. Much like his robotaxi and Cybercab plans, however, Tesla’s ability to build and sell millions of units of Optimus depends on making the tech workable and affordable, which it has not done yet.
The departures of Lamacchia and Awasthi also underscore a continuing problem that Tesla’s board appears uninterested in solving: the lack of a strong executive team and a clear succession plan for the post-Musk era. Beyond its CFO, Tesla’s C-suite currently has no president, COO or executive vice presidents, or officials with titles higher than senior vice president.
For now, Tesla’s board, with its heavy promotion of Musk’s compensation package, is betting everything on him.
“I cannot imagine a scenario where the valuation of Tesla does not collapse following Elon Musk’s departure,” said Gautam Mukunda, a professor with the Yale School of Management. “We have to invent whole new terms for the key man risk involved here. Normal key man risk doesn’t even apply – and in particular doesn’t apply when you’re talking to someone who has, by his own admission, behaviors that are remarkably risky.”
