BMW is collaborating with component supplier Draxlmaier Group for the production of high-voltage electric/hybrid vehicle batteries in Thailand.

The Thai government's Board of Investment (BoI) last month gave the green light to the German automaker's second application for additional tax incentives on a THB540m (US$16.4m) investment to further expand its hybrid vehicle production operations in the country.

Around THB400m of this additional investment, including the cost of purchasing land, will be used for a battery production facility being built in the WHA Chonburi Industrial Estate – about 15km from BMW's vehicle assembly factory in Amata City Industrial Estate in Rayong province.

A previous application by BMW for tax incentives on an additional THB700m investment to expand its hybrid vehicle facilities in Rayong was approved in July.

Draxlmaier's local subsidiary, DTS Draxlmaier Automotive System Thailand, is in charge of building and operating the battery plant. Production of battery modules is scheduled to become operational in mid-2019.

Draxlmaier is a long-standing partner of BMW and already supplies wiring harnesses for BMW cars assembled at Rayong.

The Rayong factory is responsible for supplying plug-in hybrids to markets across south east Asia. Its current range includes the 330e, the 530e, the X5 hybrid and the 740Le.