diff --git a/package.json b/package.json
index c206996bbc..34df5c68e5 100644
--- a/package.json
+++ b/package.json
@@ -429,7 +429,7 @@
     "typed-emitter": "^1.4.0",
     "typedoc": "0.23.14",
     "typedoc-plugin-markdown": "^3.13.1",
-    "typescript": "^4.8.2",
+    "typescript": "^4.8.3",
     "typescript-plugin-css-modules": "^3.4.0",
     "webpack": "^5.74.0",
     "webpack-cli": "^4.9.2",
diff --git a/src/extensions/extension-discovery/extension-discovery.ts b/src/extensions/extension-discovery/extension-discovery.ts
index 40df43ebdf..e6f500805a 100644
--- a/src/extensions/extension-discovery/extension-discovery.ts
+++ b/src/extensions/extension-discovery/extension-discovery.ts
@@ -363,7 +363,8 @@ export class ExtensionDiscovery {
       const id = this.getInstalledManifestPath(manifest.name);
       const isEnabled = this.dependencies.extensionsStore.isEnabled({ id, isBundled });
       const extensionDir = path.dirname(manifestPath);
-      const npmPackage = path.join(extensionDir, `${manifest.name}-${manifest.version}.tgz`);
+      const packedName = manifest.name.replaceAll("@", "").replaceAll("/", "-");
+      const npmPackage = path.join(extensionDir, `${packedName}-${manifest.version}.tgz`);
       const absolutePath = (isProduction && await this.dependencies.pathExists(npmPackage)) ? npmPackage : extensionDir;
       const isCompatible = isBundled || this.dependencies.isCompatibleExtension(manifest);
 
@@ -390,28 +391,11 @@ export class ExtensionDiscovery {
 
   async ensureExtensions(): Promise<Map<LensExtensionId, InstalledExtension>> {
     const bundledExtensions = await this.loadBundledExtensions();
-
-    await this.installBundledPackages(this.packageJsonPath, bundledExtensions);
-
     const userExtensions = await this.loadFromFolder(this.localFolderPath, bundledExtensions.map((extension) => extension.manifest.name));
-
-    for (const extension of userExtensions) {
-      if (!(await this.dependencies.pathExists(extension.manifestPath))) {
-        try {
-          await this.dependencies.installExtension(extension.absolutePath);
-        } catch (error) {
-          const message = error instanceof Error
-            ? error.message
-            : String(error || "unknown error");
-          const { name, version } = extension.manifest;
-
-          this.dependencies.logger.error(`${logModule}: failed to install user extension ${name}@${version}: ${message}`);
-        }
-      }
-    }
-
     const extensions = bundledExtensions.concat(userExtensions);
 
+    await this.installBundledPackages(this.packageJsonPath, extensions);
+
     return this.extensions = new Map(extensions.map(extension => [extension.id, extension]));
   }
 
@@ -420,10 +404,13 @@ export class ExtensionDiscovery {
    */
   installBundledPackages(packageJsonPath: string, extensions: InstalledExtension[]): Promise<void> {
     const dependencies = Object.fromEntries(
-      extensions.map(extension => [extension.manifest.name, extension.absolutePath]),
+      extensions.filter(extension => extension.isBundled).map(extension => [extension.manifest.name, extension.absolutePath]),
+    );
+    const optionalDependencies = Object.fromEntries(
+      extensions.filter(extension => !extension.isBundled).map(extension => [extension.manifest.name, extension.absolutePath]),
     );
 
-    return this.dependencies.installExtensions(packageJsonPath, { dependencies });
+    return this.dependencies.installExtensions(packageJsonPath, { dependencies, optionalDependencies });
   }
 
   async loadBundledExtensions(): Promise<InstalledExtension[]> {
diff --git a/src/extensions/extension-installer/extension-installer.ts b/src/extensions/extension-installer/extension-installer.ts
index a2781f15bc..1764435a54 100644
--- a/src/extensions/extension-installer/extension-installer.ts
+++ b/src/extensions/extension-installer/extension-installer.ts
@@ -42,7 +42,7 @@ export class ExtensionInstaller {
       });
 
       logger.info(`${logModule} installing dependencies at ${this.dependencies.extensionPackageRootDirectory}`);
-      await this.npm(["install", "--no-audit", "--only=prod", "--prefer-offline", "--no-package-lock"]);
+      await this.npm(["install", "--audit=false", "--fund=false", "--only=prod", "--prefer-offline"]);
       logger.info(`${logModule} dependencies installed at ${this.dependencies.extensionPackageRootDirectory}`);
     } finally {
       this.installLock.release();
@@ -58,7 +58,7 @@ export class ExtensionInstaller {
 
     try {
       logger.info(`${logModule} installing package from ${name} to ${this.dependencies.extensionPackageRootDirectory}`);
-      await this.npm(["install", "--no-audit", "--only=prod", "--package-lock=false", "--prefer-offline", "--no-package-lock", name]);
+      await this.npm(["install", "--audit=false", "--fund=false", "--only=prod", "--prefer-offline", name]);
       logger.info(`${logModule} package ${name} installed to ${this.dependencies.extensionPackageRootDirectory}`);
     } finally {
       this.installLock.release();
diff --git a/yarn.lock b/yarn.lock
index d753fda2fb..2fcacf8460 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -12639,10 +12639,10 @@ typescript-plugin-css-modules@^3.4.0:
     stylus "^0.54.8"
     tsconfig-paths "^3.9.0"
 
-typescript@^4.8.2:
-  version "4.8.2"
-  resolved "https://registry.yarnpkg.com/typescript/-/typescript-4.8.2.tgz#e3b33d5ccfb5914e4eeab6699cf208adee3fd790"
-  integrity sha512-C0I1UsrrDHo2fYI5oaCGbSejwX4ch+9Y5jTQELvovfmFkK3HHSZJB8MSJcWLmCUBzQBchCrZ9rMRV6GuNrvGtw==
+typescript@^4.8.3:
+  version "4.8.3"
+  resolved "https://registry.yarnpkg.com/typescript/-/typescript-4.8.3.tgz#d59344522c4bc464a65a730ac695007fdb66dd88"
+  integrity sha512-goMHfm00nWPa8UvR/CPSvykqf6dVV8x/dp0c5mFTMTIu0u0FlGWRioyy7Nn0PGAdHxpJZnuO/ut+PpQ8UiHAig==
 
 typical@^4.0.0:
   version "4.0.0"