BANGKOK (Reuters) -South Korean auto maker Hyundai Motor Company will invest 1 billion baht ($28 million) to set up a facility to assemble electric vehicles and batteries in Thailand, the country's Board of Investment (BOI) said on Wednesday.

Thailand's booming EV sector is currently dominated by Chinese carmakers, including BYD and Great Wall Motors, which are using the country as a manufacturing base for exporting vehicles across Southeast Asia.

The Hyundai factory, to be located just southeast of the capital city of Bangkok, will start production in 2026, according to a BOI statement.

"Thailand's strong existing supply chain will allow Hyundai to source not less than a third of the raw materials and parts it needs from within Thailand, thus supporting the local industry," BOI Secretary General Narit Therdsteerasukdi said.

Electric vehicle sales are surging across Southeast Asia, led by BYD, eating into the internal combustion engine car market dominated by Japanese and Korean firms.

Thailand, the region's biggest auto manufacturing hub, accounted for 55% of all Southeast Asia's EV sales in the first quarter, according to Counterpoint Research.

($1 = 35.6200 baht)

(Reporting by Chayut Setboonsarng and Devjyot Ghoshal, Editing by John Mair)