Tesla Inc. and its Chinese competitor NIO Inc. are looking into fires involving their vehicles, as videos of a car bursting into flames circulate on social media in the world’s largest electric auto market.

A white sedan bearing Tesla’s logo was caught on a video taken from a closed-circuit camera emitting smoke from both sides Sunday evening, before catching fire. A team from Tesla has been sent to Shanghai to look into the incident and is in touch with local authorities, the carmaker...

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