Mercedes-Benz will be the first car manufacturer in Thailand to produce hybrid batteries locally. The German premium brand will lay the foundation stone for a plug-in hybrid (PHEV) battery plant this month, and the facility will start production later this year, the Bangkok Post reports.

The new battery plant will be located where Mercedes’ existing vehicle assembly site is in Samut Prakan. The lithium-ion batteries will be for Thai-assembled PHEV models such as the C 350e, E 350e, S 500e and GLE 500e SUV. In the future, the plant will make batteries for full electric vehicles, the report says. The Post‘s source mentions a production capacity of 5,000 units, which can easily be doubled according to demand.

In January, president and CEO of Mercedes-Benz Thailand Michael Grewe announced that the company had applied for Thailand Board of Investment (BoI) privileges for both PHEV and full EV categories.

Fellow German premium brand BMW, which also assembles and sells PHEVs in Thailand, has similar plans to localise hybrid battery production. BMW’s battery plant is scheduled to come online next year.

Thailand has of late put in efforts to attract carmakers to build green cars such as hybrids, PHEVs and EVs in the country. Last year, the BoI approved promotional privileges for carmakers. Market leader Toyota was the first to apply for and receive the BoI privileges under the hybrid category, and it will be the first to roll out a new model under the scheme with the Toyota C-HR Hybrid this month.