Massive cargo ship Felicity Ace, laden with luxury cars bound for US, sinks in mid-Atlantic

A burnt-out cargo ship carrying thousands of luxury cars from Germany to the United States sank in the mid-Atlantic 13 days after a fire broke out aboard, a port official said. 

Joao Mendes Cabecas, the captain of the nearest port on the island of Faial, told Reuters the Panama-flagged Felicity Ace sank as efforts to tow it began due to structural problems caused by the fire and rough seas.

"When the towing started … water started to come in," he said. "The ship lost its stability and sank."

The Felicity Ace sank about 400 kilometres off Portugal's Azores Islands as it was being towed, MOL Ship Management in Singapore said in a statement. A salvage team had put out the fire.

The Portuguese navy confirmed the sinking, saying it occurred outside Portuguese waters.

A Portuguese Air Force helicopter evacuated the 22 crew members when the fire first broke out, setting the ship adrift.

Ocean-going tugboats with firefighting equipment had been hosing down the ship's hull to cool it.

It was not clear how many cars were on the ship, but vessels of the Felicity Ace's size can carry at least 4,000 vehicles.

European carmakers declined to discuss how many vehicles and what models were on board, but Porsche customers in the United States were being contacted by their dealers, the company said.

"We are already working to replace every car affected by this incident and the first new cars will be built soon," said Angus Fitton, vice president of PR at Porsche Cars North America, Inc.

The ship was transporting electric and non-electric vehicles, according to Portuguese authorities.

Suspicion on what started the fire on February 16 has fallen on lithium batteries used in electric vehicles, though authorities say they have no firm evidence about the cause.

Authorities feared the ship could pollute the ocean.

The ship was carrying 2,000 metric tons of fuel and 2,000 metric tons of oil. It can carry more than 17,000 metric tons of cargo.

The Portuguese navy said in a statement that only a few pieces of wreckage and a small patch of oil was visible where the ship went down. The tugboats were breaking up the patch with hoses, it said.

A Portuguese Air Force plane and a Portuguese navy vessel are to remain at the scene on the lookout for signs of pollution.

Mr Cabecas said there were fears the fuel tanks could be damaged as the vessel lay at the bottom of the Atlantic at a depth of around 3,500 metres.

Volkswagen, which said last week the damage to the vehicles was covered by insurance, confirmed the ship had sunk.

Insurance experts said the incident could result in losses of $US155 million ($213 million).

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