On January 3, 2021, about 1118 eastern standard time, a Diamond Aircraft DA 40, N489RS, was substantially damaged when it was involved in an accident near Portsmouth, New Hampshire. The flight instructor and pilot receiving instruction were not injured. The airplane was operated as a Title 14 Code of Federal Regulations Part 91 instructional flight. After a short flight, the pilot performed a landing on runway 34. The instructor assumed control of the airplane during the roll, taxied to the hold-short line at the approach end of runway 34, and waited for landing traffic. Soon after, the pilot of the landing airplane announced over the tower radio frequency that the airplane holding short was “on fire.” The instructor confirmed that smoke was rising from beneath the right wing and both he and the pilot egressed the airplane without injury. Video recorded by the pilots before the arrival of aircraft rescue and firefighting (ARFF) vehicles showed the right main landing gear tire, wheel pant, landing gear strut, and underside of the right wing in flames. ARFF arrived within 3 minutes of notification and extinguished the fire. The instructor reported that he noticed no anomalies with the performance and handling of the airplane during taxi. He stated that, throughout the taxi back to the hold-short line, the steering forces required and the braking power he experienced were “normal.” The removable SD card from the Garmin G1000 Multifunction Display was undamaged and was downloaded normally. A review of the recorded data revealed that, after landing, the airplane turned right at the first perpendicular taxiway (Bravo) and again turned right onto the parallel taxiway (Alpha). While on taxiway Alpha, the ground speed varied between about 22 and 27 knots. The ground speed indication was displayed to the flight crew. At the start of a right turn where Alpha taxiway turned 90° and intersected the approach end of runway 34, the ground speed was about 23 knots. The ground speed then decreased sharply several times, each time followed by several seconds of constant or slightly increasing ground speed until the data ended, as the airplane neared the hold short line for runway 34. The airplane was recovered to a maintenance facility and examined by a representative of the manufacturer under the supervision of a Federal Aviation Administration aviation safety inspector. Examination revealed normal wear of the brake pads and no pre-accident mechanical anomalies. Examination of the fuel tank directly above the right main landing gear wheel and brake assembly revealed that it was intact with no leaks and contained about 15 gallons of fuel.