German electronics company Dräxlmaier has launched a high-voltage battery production plant at Chonburi, Thailand. Collaborating with BMW on the project, Dräxlmaier will be undertaking production to supply BMW’s new range of plug-in hybrid cars being built at the firm’s Rayong manufacturing hub in Thailand.

Production of the cars started in July, as did assembly of batteries and modules at Dräxlmaier’s plant. The battery cells are provided by Samsung of South Korea along with other parts like aluminium housing, electronics, and cables. The finished batteries meet Thailand’s local content requirement regulations according to BMW, which declined to name other suppliers.

“The supply chain for a production plant is a very complex topic, as all production locations are linked to each other in our entire global production network. It is in our interest to keep transport distances as short as possible and to purchase locally. The supply chain for the local production of batteries is already as ideal as possible," says BMW Group.

Dräxlmaier and BMW have been partners for 53 years, entering a new chapter of collaboration with the Rayong facility.

Uwe Quaas, managing director of BMW Group Manufacturing Thailand, said in a statement, “The start of local battery production enables us to better respond to growing domestic demand for electrified vehicles in Thailand. This new capability also strengthens the performance of Plant Rayong in fulfilling the country’s mission of sustainable mobility.”

BMW said that experts from its headquarters in Munich were involved in setting up the Dräxlmaier plant “to set up a solid foundation for the future.” The two firms have been partners for 53 years. Advanced training and qualification programmes in battery production began a year for Dräxlmaier staff at BMW’s Dingolfing plant which houses the brand’s competence centre for e-drive production. Dingolfing is also BMW’s pilot plant for e-drive trains in Munich.

BMW has invested $22.6 million in PHEV production, supported by Thailand’s Board of Investment through import tax exemption for machinery and corporate income tax waivers for a defined period. BMW has jointly invested another $16.4 million with Dräxlmaier in the battery assembly plant.

Currently the Chonburi facility builds batteries for BMW's range of plug-in hybrid cars.

A BMW spokeswoman was quoted by Automotive Logistics saying, “The BMW Group is producing the batteries as locally as possible.” Transporting batteries is not an easy task due to their weight, safety considerations, and more factors. “The supply chain for a production plant is a very complex topic, as all production locations are linked to each other in our entire global production network. It is in our interest to keep transport distances as short as possible and to purchase local. The supply chain for the local production of batteries is already as ideal as possible.”

The spokeswoman also added that there are no plans to supply the batteries to other OEMs since they are produced to meet BMW’s exact specifications.