Elon Musk throws down the gauntlet and challenges Mercedes to spend more than $1 billion on electric cars (TSLA)

Michael Probst/AP

News broke last Thursday that Daimler, Mercedes' parent company, was investing $1 billion in its Alabama plant to start building an electric SUV in 2020.

Many outlets said the check was an obvious challenge to Tesla, a formidable competitor in the US' electric space that plans to build its own compact SUV, the Model Y, in 2020. Tesla CEO Elon Musk, however, begs to differ.

"That's not a lot of money for a giant like Daimler/Mercedes. Wish they'd do more. Off by a zero," Musk said on Sunday on Twitter.

Musk has long welcomed competition in the electric-vehicle space, saying it will help speed the growth of sustainable transportation. He open-sourced patents in 2014 as part of that aim.

Musk's comment supports his stance that automakers with a bigger cash cushion should do more to advance electric cars.

"It doesn't really harm Tesla but helps the industry," Musk said during a 2014 call, "And I think actually it will help Tesla, mostly with respect to attracting and motivating the world's best technical talent."

Daimler has been cutting checks to help advance divisions that go after Tesla's core businesses, from home energy to electric vehicles. 

In May, Mercedes partnered with Vivint Solar to sell smart solar ecosystems to California residents, a challenge to Tesla's solar-roof rollout on its home turf.

Mitsubishi FUSO, a truck unit run by Daimler, beat Tesla to the punch with the launch of its battery-powered truck on Sept. 14. Tesla plans to unveil an electric semitrailer in October.

Mercedes will also offer an electric version of all its models starting in 2022. 

Daimler is shaping up to be Tesla's biggest competitor yet, but Musk's tweet indicates he isn't wary of the mounting challenge.

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