Yup, safety has for ages been the major stumbling block with using LiIon in large battery applications. But, the whole flammability issue appears to have been solved recently by Japanese company Bridgestone. They have developed an electrolyte additive that renders the batteries non-flammable. You can read about it
here and
here, but this is an excerpt from the links:
"
Tokyo (November 20, 2002)--Bridgestone Corporation has developed technology that overcomes a stubborn drawback of lithium batteries. The company this month unveiled an additive for the batteries' electrolytic fluid that renders the fluid nonflammable. Bridgestone's additive is the first in the world to eliminate the fire danger in lithium batteries without affecting battery performance adversely.
The chief drawback of lithium batteries is the flammability of the organic solvent employed in their electrolytic fluid. That flammability is not a significant problem in small batteries. But it becomes a serious issue in large batteries. That has limited the usefulness of lithium batteries in such potential applications as electric vehicles.
The company is preparing to test-market the additive in 2003, and it projects that annual sales of Phoslyte will reach ¥1 billion in 2005 and that half of the battery makers in Japan would begin using the additive. That would boost the lithium-ion battery market from around 300 billion yen ($2.5 billion) in 2000 to 1.6 trillion yen ($13.1 billion) by 2010. "
Also, I reckon that if Hitachi and its related companies have invested so much in a factory for
LiIon destined for hybrid cars, then they must have solved the issues that were holding LiIon back from hybrid cars.
Edited to say, PS thanks for the great link Efusco!