BERLIN—A cargo ship that caught hearth final month with 1000’s of luxurious autos on board sank Tuesday morning, the ship’s administration firm stated.

MOL Ship Administration Singapore Pte Ltd, which owns the corporate that operates the ship, stated the Felicity Ace sank round 9 a.m. native time about 220 nautical miles (253 miles) off Portugal’s Azores islands after it started to tackle water and tilt to at least one aspect.

The Panama-flagged 60,000-ton service provider ship carrying round 4,000 luxurious automobiles—together with fashions from

Porsche,

Bentley, Audi, Lamborghini and different

Volkswagen AG

manufacturers—caught hearth in February and burned intensely for days.

SMIT Salvage, the Dutch firm charged with salvaging the ship, despatched a workforce of enormous oceangoing tugboats to the scene and was towing the vessel to security when it sank.

Salvage crews and the Portuguese navy had stated that the depth of the hearth may be defined by numerous electrical autos on board. Some batteries are identified to be flammable and burn at excessive temperature after they combust, making such a blaze exhausting to extinguish.

The Felicity Ace hearth is among the first on board a significant car service loaded with a considerable cargo of electrical autos. The incident has sparked debate amongst insurers and regulators about the way to safely transport such autos, a query that can acquire urgency as EVs turn into extra widespread.

Whereas the reason for the hearth on the Felicity Ace would possibly by no means be identified as a result of the ship is mendacity on the backside of the ocean, specialists say there’s a hazard that batteries in electrical automobiles can quick circuit and catch hearth. That would imply that precautions not related for standard autos might need to be taken into consideration throughout transport, regulators stated.

After the blaze stopped,

Volkswagen

had stated it anticipated “that enormous components of the practically 4,000 autos from a number of group manufacturers had been so broken within the ship hearth that they’ll not be delivered.”

Volkswagen declined to touch upon the worth of the cargo.

Incident insurance coverage specialists Russell Group Ltd. estimated that the cargo on board the Felicity Ace was price about $438 million, of which the automobiles on board accounted for about $401 million. Russell estimated that VW may face losses of not less than $155 million.

The Felicity Ace, a cargo ship carrying 1000’s of automobiles together with Porsches and Bentleys to the port of Davisville, R.I., caught hearth final week and was adrift within the mid-Atlantic after the crew was evacuated. Burning electrical car batteries difficult efforts to battle the blaze. Photograph: Portuguese Navy

Write to William Boston at william.boston@wsj.com

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