With the sales of plug-in hybrid vehicles (PHEV) in Thailand growing, Mercedes-Benz is considering investing in a battery plant in the ASEAN country to meet demand, just-auto reports.

According to the report, Michael Grewe, president of Mercedes-Benz Thailand, told reporters that the company currently imports high-voltage batteries from Germany for the PHEVs assembled in the Samut Prakan factory. The local Mercedes boss did not confirm when the plant would be built, but said a local source for the batteries is needed.

This doesn’t come as a surprise as in July, arch-rival BMW announced it is considering investing in a plant to produce batteries for its Thai-assembled PHEVs. Driven by new tax incentives for fuel-efficient vehicles (previously based purely on engine capacity) demand for premium brand PHEVs, pushed by Mercedes-Benz and BMW, has risen.

Mercedes-Benz Thailand says that it has sold 1,500 PHEVs in the Land of Smiles so far this year, with 500 units sold in August alone. That’s close to a staggering 60% of the brand’s total sales in Thailand. The three-pointed star brand sells the C 350e Sedan and Estate (RM314,045 to RM438,891), S 500e limo (RM712,455 to RM832,077) and GLE 500e SUV (RM534,481 to RM594,159) PHEVs in Thailand. PHEVs have replaced conventional hybrids in the locally-assembled line-up.

Other PHEVs sold in Thailand are the BMW 330e, BMW X5 xDrive40e, Porsche Cayenne S-E Hybrid and Volvo XC90 T8 Twin Engine.