If you think you've had a bad start to the week, Volkwagen (VLKAF) may have one over on you: thousands of Porsche, Bentley, Audi and Volkswagen cars have been stuck aboard a burning cargo ship for the last five days.
Felicity Ace, a 60,000-ton cargo ship carrying a large shipment of both luxury and standard cars from Germany, had been on its way to U.S. dealers in Rhode Island when a fire broke out aboard near Portugal’s Azores Islands. While all 22 crew members were immediately rescued to the nearest land by helicopter, a ship with over $400 million worth of cars is currently still suck somewhere off the coast of Portugal while a fire rages.
So How Did 4,000 Cars Cargo Ship Go Up In Flames?
Short answer: no one knows for sure. MOL Ship Management, the Singapore-based company that owns Felicity Ace, previously told the Wall Street Journal that there was no oil leakage and the fire was contained enough to not risk the entire ship burning down or capsizing.
Videos and photos of Felicity Ace on social media show flames billowing out into the air from the stern and eventually moving through the entirety of an abandoned ship. After other ships in proximity and the Portuguese navy rescued the crew, ships carrying firefighting equipment started arriving over the weekend.
That said, putting a stop to the fire and rescuing what's left of the cars on board has not been an easy process: a salvage ship and a team of 16 experts will only be able to access Felicity Ace by Wednesday.
While an investigation is underway and will begin for real once the ship has been fully rescued, MOL said that it would take "months before we have completed an investigation and know what happened."
MOL did, not however, comment on whether the car shipment contained any electric cars — the lithium-ion batteries within them are widely known to be more flammable than the ones within gas-powered cars.
But regardless of how the fire started, the damage is going to be substantial: Russell Group, a U.K.-based the risk modelling agency, estimated that there were over 4,000 cars aboard the ship (full capacity is at 5,000) while the damage could total over $155 million. (If the firefighting crews move quickly, it will also not be a total loss as the total value aboard Felicity Ace is at $438 million.)
Could This Crisis Help Competitors Like Tesla And Ferrari?
In the last year, the auto industry has been severely hit from all directions. A global semiconductor shortage, supply chain disruptions and slowing production rates have all resulted in a much lower supply of cars both in the U.S. and globally — KPMG previously estimated that automakers lost $100 billion in revenue in 2021.
An IHS Markit report found that car inventories are now at the lowest levels since the early 2000s while those looking to buy a car in 2022 reported both rising prices and long wait times for a range of models.
The parent company behind brands like Lamborghini, Porsche and Audi, Volkswagen Group has been responding to media requests by saying it is too early to comment on the Felicity Ace situation.
This setback is likely to lengthen the delivery time of the cars to the customers who have ordered them. Consequently, we cannot exclude that some will see competitors such as Tesla (TSLA) or Ferrari (RACE).
