A cargo ship transporting more than 3,000 Chinese-made vehicles sank after catching on fire, with experts estimating that the incident will result in $560 million in losses for the industry.

The ship, named Morning Midas, caught fire on June 3 while en route to Mexico. It was carrying 3,048 vehicles from several Chinese automakers, including Chery Automobile Co. and Great Wall Motor Co. About 750 of the cars onboard were electric or hybrid vehicles. After 20 days of smoldering, the vessel eventually sank off the coast of Alaska. The cause of the fire remains uncertain.

The incident marks the third major fire involving a cargo ship carrying electric vehicles in just three years, according to Automotive News. Previous cases include the Felicity Ace, which caught fire and sank in February 2022, and the Fremantle Highway, which burned in July 2023. Combined, the three incidents are expected to result in $1.8 billion in losses, according to Anderson Economic Group.

“This is a huge cost, and another blaring warning klaxon to the industry about the risks of shipping EVs in closed containers,” the group’s CEO, Patrick Anderson, told Automotive News.

Electric vehicles being shipped are known to pose unique fire risks. While they may not always be the source of a fire, their presence can intensify one and make it far more difficult to contain. Firefighting capabilities on cargo ships are limited, and crews are often unprepared to manage EV-specific fires.

“They are not professional firefighters,” explained Capt. said Capt. Randall Lund, senior marine risk consultant at Allianz Commercial. Crews on these ships receive basic firefighting training, which is often not sufficient for dealing with EV battery fires. Additionally, crews often don’t know the exact locations of electric vehicles onboard, making a targeted response even more difficult.

Lund said shipping companies and automakers may need to reevaluate how EVs are transported at sea. He suggested installing better fire detection systems on these ships. Lund also added that the industry may need to explain to automakers that “maybe they can’t ship 400 EVs at one time,” or that “cargo ships require additional spacing.”