Towing boats head toward burning cargo ship carrying 4,000 VWs, Porsches, Bentleys, Audis, Lambos

BERLIN/LISBON -- A ship carrying around 4,000 vehicles -- including Volkswagens, Porsches, Audis, Bentleys and Lamborghinis -- that caught fire near the coast of the Azores will be towed to another European country or the Bahamas, the captain of the nearest port told Reuters on Friday.

Lithium-ion batteries in the EVs on board the ship named Felicity Ace have caught fire and the blaze requires specialist equipment to extinguish, captain Joao Mendes Cabecas of the port of Hortas said.

It was not clear whether the batteries first sparked the fire.

"The ship is burning from one end to the other... everything is on fire about five meters above the water line," Cabeças said.

Towing boats were on route from Gibraltar and the Netherlands, with three due to arrive by Wednesday, Cabecas said. He added the vessel could not be towed to the Azores because it was so big it would block trade at the port.

U.S. economist Patrick Anderson estimated the initial loss could be $255 million.

"A quick estimate, assuming that the ship was only partially full (or that a portion of the cargo is salvaged undamaged), is that there is at least $255 million or more in lost vehicles, plus many millions in salvage costs on top of that, and downstream losses in auto dealerships. It could be more," Anderson said in an emailed statement on Friday.

A 16-person salvage team from Smit Salvage, owned by Dutch marine engineer Boskalis, was sent to the ship to help control the flames, Boskalis said.

The Panama-flagged ship, owned by Snowscape Car Carriers SA and managed by Mitsui O.S.K. Lines Ltd., was travelling from Emden, Germany -- where Volkswagen has a factory -- to Davisville, R.I., based on the Maritime Traffic website. Davisville is a port about 70 miles south of Boston.

The 22 crew members on board were evacuated on Wednesday, when the fire broke out, with no one hurt, Portugal's navy said in a statement.

Around 1,100 Porsches and 189 Bentleys were on board, spokespeople for the car brands said. Audi, another Volkswagen brand, confirmed some of its vehicles were also on the ship but did not state how many.

An internal email from Volkswagen’s U.S. operations revealed there were 3,965 Volkswagen Group vehicles aboard the ship.

More than 100 of those cars were headed for the Port of Houston in Texas, with GTI, Golf R, and ID.4 models deemed to be at risk, according to the email. The auto industry is already struggling with supply issues, including pandemic-related staffing woes and the global chip shortage.

YouTuber Matt Farah, whose automotive review channel "The Smoking Tire" has more than a million followers, said on Twitter he was contacted by a car dealer who said the Porsche he ordered was aboard the ship.

"My car is now adrift, possibly on fire, in the middle of the ocean," Farah tweeted.

It’s not the first time the manufacturer has lost merchandise at sea. When the Grande America caught fire and sank in 2019, more than 2,000 luxury cars, including Audis and Porsches, sank with it.

A spokesperson for Lamborghini’s U.S. operation declined to comment on the number of cars the company had on board or which models were affected, but said that they are in contact with the shipping company to get more information about the incident.

Felicity Ace is roughly the size of three football fields.

Reuters, Bloomberg and Philip Nussel from Automotive News contributed to this report.