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Volkswagen is building an EV factory near Shanghai, should Tesla be worried?

The new facility will be environmentally friendly and build vehicles on the all-electric MEB platform.

Volkswagen ID Buzz concept
Volkswagen's I.D. Buzz rides atop the company's MEB platform, and could be among the vehicles built at the new Shanghai plant in 2020. 

EVs are big sellers in China and capitalizing on that has become a priority for many manufacturers. Volkswagen is the latest to get serious. The company announced Friday it plans to build a plant near Shanghai just for vehicles that ride on its new MEB electric platform.

All of Volkswagen's I.D. concepts -- like the I.D. Buzz and I.D. Crozz -- will ride on the MEB platform. Both are supposed to go into production in or around 2020, which is conveniently when VW China's new plant is slated to open.

"Through Volkswagen's MEB platform, we will be able to easily produce state-of-the-art electric vehicles for our Chinese customers on a high scale," Herbert Diess, Volkswagen Group's board chairman, said in a statement. "The Volkswagen Group, its brands and their Chinese joint venture partners focus consistently on sustainable mobility and push the transformation of the automotive industry in China and worldwide. In this way, we emphasize the importance of the Chinese market for the Volkswagen Group."

The VW factory is being built to have a minimal impact on the environment with 27 different technologies being employed to reduce water pollution, carbon dioxide output and save energy. The facility will be built following the ideas behind "Industry 4.0" with a high degree of automation. Volkswagen says it will install more than 1,400 advanced robots to improve safety and efficiency.

With this announcement and Tesla's news that it had secured the land for its own Shanghai-adjacent Gigafactory 2, things are starting to get interesting on China's central coast.