BMW said it was planning a second battery assembly factory in Thailand to meet growing demand for battery electric vehicles (BEVs), according to local reports.

The automaker has a vehicle assembly plant in Rayong province along with a factory which assembles hybrid vehicle batteries in a venture with Draxlmaier.

With demand for BEVs in Thailand and south east Asia surging the company was finalising plans to build a BEV plant had decided also to localise battery assembly.

BMW was also concerned about the effects the recent attacks on commercial shipping in the Red Sea were having on supply chains.

BMW Thailand chief Alexander Baraka said attacks on commercial ships in the Red Sea “are causing some short-term impact on [us] as the shipping of some auto components to Asia is delayed.”

Baraka said Rayong assembed battery systems would be fitted to locally made BEVs and shipped to other company assembly plants in the region. Thailand would become its third overseas location for BEV batteries after China and Hungary.

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The Thai government has been working hard to attract foreign BEV manufacturers into the country with a growing number of Chinese and Japanese companies having already decided to invest.

Attention has now turned to German automakers.

The National Electric Vehicle Policy Committee recently agreed to endorse cash incentives for local cell production.