It's not exactly unusual for a car to catch on fire after getting rear-ended at more than 100 miles an hour.

That's the argument that BYD is making on the issue of the most recent setback – that an all-electric BYD e6 taxi in Shenzhen exploded, killing the driver and two passengers, after being rear-ended by a sports car going about 112 miles per hour – according to both the Wall Street Journal and the New York Times. The China-based automaker repeated the fact that the batteries used in the e6 have passed abuse tests without catching fire.

BYD, whose investors include Warren Buffet, has seen its shares fall by more than 40 percent since February, according to the Times. Meanwhile, BYD's car sales through April fell eight percent from a year earlier, even though overall auto sales in China rose six percent, indicating that the company's vehicles are falling out of favor. The company is now hoping that more aggressive Chinese government investment in electric-drive vehicles will help both development and sales. China's finance ministry has said it plans to fund as much as $315 million worth of annual hybrid and electric vehicle development.

In April, BYD said that the 186-mile single-charge range e6 would start U.S. sales by year end, echoing similar claims made for a U.S. launch in 2010 and 2011. BYD also has an agreement with Mercedes-Benz parent Daimler to build a battery-electric vehicle called the Denza, which is slated to start production next year. BYD opened its U.S. headquarters in Los Angeles late last year.

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