A Melbourne schoolgirl has second degree burns to her thigh after the battery inside her Samsung Galaxy S4 phone exploded while she was on her way to school on Friday morning.

Croydon woman Courtney Handley said she had just dropped her nephew off at Mooroolbark College, and was driving her niece, 15-year-old Brooklyn McDonald, to Oxley College about 8.30am, when she heard "hissing".

The phone had caught fire after exploding in the girl's lap, while she was in the front passenger seat of the car.

"All of a sudden there was a hissing noise, then there was a big pop, and there was smoke everywhere inside the car," Mrs Handley said.

"There were flames and burns to her lap, burns in the middle of the car and then the battery flew out of her phone and landed onto the ground at her feet.

"I was trying to stamp out the fire while she was screaming, I pulled over, got out of the car and made sure she was alright. She was pretty hysterical."

Mrs Handley's 18-month-old son was sitting in the middle seat at the back of the car, at the time of the explosion.

"He was crying as well, we were all crying and scared," she said.

Brooklyn never made it to school on Friday. Mrs Handley said she took her niece straight to a local medical clinic, where she was treated for second and first degree burns to her thigh.

"It burnt through her school uniform and gave her second degree burns on her thighs," Mrs Handley said.

"She's a bit shaken, her legs it really sting, she's applying cream to them.

"She just had headphones plugged in, the phone wasn't playing any music, it wasn't charging or anything. Luckily she wasn't holding it to her face, it was just her thighs."

The car, a Ford Territory, also suffered significant damage to its interior, which will cost Mrs Handley, who said she wanted compensation from Samsung.

"It burnt through the material and it needs to get detailed, there's ash and soot and melted marks from the battery."

She said the phone belonged to Brooklyn's father, and the battery was purchased off Ebay three months ago.

A spokeswoman for Samsung later told Fairfax Media the battery was not a genuine Samsung product.

"We are currently in touch with the teen's parents and are assisting the family. Samsung has examined photos of the device and it is clear to us that the battery is non-genuine and a counterfeit product," she said.

"The customer has also confirmed to Samsung that the battery was not the original battery supplied with the Galaxy S4 and they had purchased the battery online."

The incident adds to further woes for Samsung. Last year, Samsung Electronics scrapped its flagship Note 7 smartphone and told customers return their devices after weeks of bruising reports of phones igniting and images of scorched handsets.

In early September, the world's largest smartphone maker blamed "a very rare manufacturing process error" for the problems.