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Li-ion chemistries vary. Some are not flammable: the lithium phosphate chemistry used by A123 for instance. Li-phosphate is also more powerful and more durable than highly flammable, high energy, lithium cobalt. Li-cobalt wins big on energy capacity: the battery of choice for laptops and Teslas.

Tesla builds redundant safety systems into their cars to safely use the volatile, energy dense lithium cobalt batteries. I'd say the Tesla autos are quite a bit safer than gasoline powered cars: gasoline is highly flammable itself, and liquid to boot.
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