Volkswagen said it is too early to comment on reports the fire on its charter ship transporting nearly 4,000 upmarket vehicles to the U.S. was started by electric cars.

Meanwhile investment bank UBS said if the whole cargo was destroyed, this could slash around €400 million ($454.50 million) from VW profits.

A report in Britain’s Daily Mail quoted the Felicity Ace’s captain Joao Mendes Cabecas saying Saturday, lithium-ion batteries in the electric cars on board caught fire, and the blaze required specialist equipment to extinguish it. Cabecas was speaking at the Azores port of Hortas after being rescued with crew members from the blazing vessel.

“The ship is burning from one end to the other. Everything is on fire about five meters above the water line,” the Daily Mail quoted him as saying.

But the cause of the fire has yet to be officially confirmed.

VW responded to email questions with this comment.

“At this time any comments on the cause are speculative and of course will be subject to investigation once the ship is made safe,” VW said.

Electric cars have been in the news for suddenly catching fire, but so far there has not been enough evidence to demonstrate battery-powered vehicles are uniquely vulnerable. Car fires are relatively commonplace, but the media often highlights electric car fires.
Investment bank UBS said if all the vehicles on board were damaged or destroyed, assuming an average selling price of €100,000 ($115,000), this would lead to a first-quarter loss for VW of about €400 million.

The Felicity Ace was carrying 3,965 VWs, Porsches, Audis, Bentleys, and Lamborghinis.

“The exported vehicles are high-price, high-margin products, therefore the incident could have a meaningful financial impact on Q1 numbers. Worst case, if all the vehicles were damaged or destroyed, we estimate a loss of about €400 million, reflecting the high share of luxury vehicles on the ship,” UBS said.

“However, we would expect financial compensation by an insurance company in such a scenario. Even if the vehicles can be recovered, the shipment to the customers could be meaningfully delayed, with a small negative impact on Q1 numbers,” UBS said.

Meanwhile, if the electric cars on board were the cause of the blaze, that would have a big negative impact on the future of transporting inter-continental electric car exports.

As electric cars become more ubiquitous, a series of myths and unproven risks or disadvantages have built up. Spontaneous fires were said to be a threat because of laptop, tablet or phone fires and their similar design. Extreme climate could unsettle batteries, including large temperature swings and elevated levels of dust and particulates. The need for high voltage fast charging stations was said to be a potential fire risk. But so far these risks are more speculative than proven, and more data is required.

Extracted in full from: VW Says Premature To Comment On Report Electric Cars Started Atlantic Transporter Fire (