Could Artificial Intelligence Cause World War Three?  Elon Musk fears it might
Musk wants Mercedes to do more than $1bn

Elon Musk, in a Twitter exchange with USA TODAY Money, took a shot at automotive giant Mercedes by saying that the German company could easily afford to invest more in the electric vehicle (EV) market.

It is not clear if Musk was taunting Mercedes with regard to Tesla's lead in the market, or if he just wants more healthy competition. Either way, an increase in production of electric cars can only be a good thing for customers since it is likely to bring prices down.

The exchange on social media took place after the news of Mercedes' investment broke last week – the German car manufacturer has reportedly pumped in $1bn into electric car manufacturing in its Alabama premises in the US. It is also planning a million square foot battery manufacturing centre near its existing Tuscaloosa plant.

The USA TODAY Money report that Musk reacted to stated that Mercedes is taking on Tesla with their investment. He responded by saying that they are "off by a zero", hinting that the German giants should have invested $10bn instead.

While it seems like the $1bn investment is a lot of money and that Mercedes is taking this initiative seriously, Musk pointed out that it's "not a lot of money for a giant like Daimler/Mercedes," adding, "I wish they'd do more."

In a report published by USA TODAY, Sanford Bernstein analyst Max Warburton said, "Mercedes is convinced it can match Tesla battery costs, beat its manufacturing and procurement costs, ramp up production faster and have better quality. It is also confident its cars will drive better."

This move away from combustion engines towards all-electric is something that several major carmakers are taking seriously. Volvo was one of the first major automobile manufacturers to announce that they are going all-electric as early as 2019.

Many countries have also vowed to move to all-electric cars in the future, with UK and France already making it clear that they will outlaw all non-electric vehicles on their roads by 2040.

Even oil companies have realised that the car market is moving away from petrol and diesel, with Shell's top boss saying that his next car is going to be electric.

However, despite all the activity in this particular segment, USA TODAY Money reports that electric vehicle sales are still tepid. Tesla, though, has managed to carve out a niche for itself in this with offerings in the premium sedan slot, a crossover, and a small, affordable car as well.

Mercedes' full-fledged entry into the market could mean more choice for consumers, seeing that they have promised electric versions of all their cars by 2022.

Update: Daimler responded to Musk's comment by tweeting:

The $1bn figure that was quoted by USA TODAY Money seems to be centered around the costs involving only the battery factory in Alabama, with the company pointing out that their global investments in electric car development exceeds $10bn – the missing zero that Musk spoke of.