  Using first-principles calculations, we identify the origin of the observed
charge density wave (CDW) formation in a layered kagome metal CsV$_3$Sb$_5$. It
is revealed that the structural distortion of kagome lattice forming the
trimeric and hexameric V atoms is accompanied by the stabilization of
quasimolecular states, which gives rise to the opening of CDW gaps for the
V-derived multibands lying around the Fermi level. This Jahn-Teller-like
instability having the local lattice distortion and its derived quasimolecular
states is a driving force of the CDW order. Specifically, the saddle points of
multiple Dirac bands near the Fermi level, located at the $M$ point, are
hybridized to disappear along the $k_z$ direction, therefore not supporting the
widely accepted Peierls-like electronic instability due to Fermi surface
nesting. It is further demonstrated that applied hydrostatic pressure
significantly reduces the interlayer spacing to destabilize the quasimolecular
states, leading to a disappearance of the CDW phase at a pressure of ${\sim}$2
GPa. The presently proposed underlying mechanism of the CDW order in
CsV$_3$Sb$_5$ can also be applicable to other isostructural kagome lattices
such as KV$_3$Sb$_5$ and RbV$_3$Sb$_5$.
