Cargo Ship Sinks with Thousands of VW Cars — Who Will Pay?

(In the 7th paragraph, it was corrected that the ship sank 150 kilometers south of the Azores.)

BRAUNSCHWEIG (dpa-AFX) — Thousands of VW vehicles sank in February 2022 when the car carrier MS "Felicity Ace" went down after a fire. Now, the question is: Who will cover the loss? A damages lawsuit is now underway at the Braunschweig Regional Court to determine liability.

The ship's owner and shipping company, along with insurers, are blaming a lithium battery from a Porsche Taycan for the blaze. The battery of the electric car allegedly self-ignited on board due to a technical defect. Porsche and Volkswagen dispute this. "Volkswagen considers the accusations to be unfounded and will vigorously defend itself," a company spokesperson said.

What caught fire first?

The lawsuit targets not only Porsche but also Volkswagen Group Logistics. The plaintiffs are demanding damages in the hundreds of millions of euros — the exact amount remains disputed. On the plaintiffs' side is, among others, Japanese shipping company Mitsui O.S.K. Lines, which, according to the presiding judge, is highly experienced in car transportation. Similar cases are ongoing in courts in Stuttgart and Panama.

At the heart of the matter is, among other things, the question of whether a car triggered the fire or whether the vehicles caught fire due to a blaze that started elsewhere, said presiding judge Ingo Michael Groß. "Which came first, the chicken or the egg?" Both sides were already arguing at the start of proceedings about which deck the fire started on and how reliable previous statements from the crew members are.

Another key issue is who knew what, and when. "Who had prior knowledge?" the presiding judge asked. This concerns whether the shipping company should have implemented better safety measures, or whether Volkswagen should have provided more thorough information about potential hazards posed by the vehicles.

Volkswagen argues that the shipping company was fully informed about the cargo and associated risks. The plaintiffs, meanwhile, point out that the Porsche Taycans were equipped with new types of batteries that the shipping company was unprepared for.

Car Carrier Sank off the Azores

The specialized vessel was en route from Emden, Germany, to the United States carrying 3,928 vehicles — mostly new cars from VW brands such as Audi, Bentley, Lamborghini, Seat, and Porsche. Among them were more than 100 Porsche Taycan electric cars. The fire broke out near the Azores on February 16, 2022, six days after departing Emden. No one was injured: the ship was evacuated one hour after the fire was detected. Half a month later, during a towing attempt, the vessel sank 150 kilometers south of the Azores in the Atlantic Ocean.

Both parties have until October 8 to submit their initial statements. Afterwards, they will have several more weeks to respond to each other's positions. Witnesses are not expected to be heard until a later stage; first, expert testimony will be presented. The ship itself cannot aid the investigation — it now rests at a depth of more than 3,000 meters.

The outcome will likely hinge on how precisely the plaintiffs can explain the alleged technical defect in the Porsche Taycan. The hurdles in this case are high, said the presiding judge. The plaintiffs' side also conceded that the risk in this case is significant for them. Both parties can reach an out-of-court settlement at any time.

Was Better Protection Possible?

The presiding judge's remarks also made clear that not everything on board the ship functioned smoothly from a technical standpoint. For example, the fire suppression system did not activate properly. Volkswagen's side argues that this system could have slowed the spread of the fire, allowing the ship to reach a port. The lawyers also questioned the safety procedures on board. The plaintiffs counter that the installed foam suppression system was not designed for fires involving electric vehicle batteries. While, according to current scientific knowledge, EVs are less likely to catch fire, such fires are much more intense when they do occur.

Insurers Demand Better Fire Suppression Systems

Following the devastating fire on the cargo ship, the German Insurance Association (GDV) called for improved fire suppression systems on such massive transport vessels. "With cargo values reaching up to 500 million euros on board, more should be invested in safety on these ships," said GDV chief executive Jorg Asmussen at the time. /xma/DP/jha/