In the other semifinal, SoftBank, skippered by New Zealander Dean Barker, took a 3-1 lead over Artemis Racing after winning both their races.
The victor of each first-to-five semi-final progresses to the challenger final and whoever wins that will take on Oracle Team USA in the America's Cup Match starting on June 17. Although it remained to be seen just how extensive the damage was, he said, "we feel like we'll be able to fix it and get back into action". "We felt we were in for a real battle today and obviously it was a bit of a shame there wasn't much of a battle".
"Where we're getting to with this journey and the America's Cup in recent times is really positive for the Cup and the sport of sailing".
It's been a dramatic week in the America's Cup challenger eliminations on Bermuda's Great Sound, and the main event is still a week away.
Artemis and Team New Zealand will race three times again tomorrow morning.
Chase boats followed to pick up the pieces.
Team New Zealand merely had to start the second race and the race committee immediately black-flagged it, giving the Kiwis a 2-0 lead in the best-of-9 series.
"Once they got in front it was always going to be hard to claw it back", said Barker, who said he hoped the SoftBank Team would return to challenge in the next America's Cup.
The Kiwis began to follow suit just like they did in the earlier race, but Peter Burling and team launched high on their foils, hit BARs wake zone only to have the rudder loose its grip and pop out.
"I think this America's Cup class has proven through this competition to be an incredible boat", he added.
He has won the cup before, as tactician with Oracle Team USA in their 2013 comeback against Emirates Team New Zealand.
The sailors are OK other than some scratches and bruises, the team said. Outteridge and Iain Jensen, an Artemis crewman, won the gold medal in the 49er class in the 2012 Olympics, with Burling and Blair Tuke, also a Team New Zealand crewman, taking the silver. Burling sailed ahead to a 47-second victory.
Team New Zealand twice defeated the Swedish syndicate in the qualifying phase.