In some conditions (following a shock, such as dropping down a mobile phone), electrodes damaged, and as a consequence a fire can be ignited in the worst scenario. So far 18 reports have been collected.
In the problem seems to be different than for the notebook battery recall (over 10 millions units), it appears quite obvious that such high capacity batteries should be produced according to state-of-the-art procedures, and at the end it might be much cheaper to have them manufactured in Europe or America, than in low-cost countries.
[update]
Interesting supplementary information from one or our readers, Isidore:
The problem with conventional lithium ion/cobalt oxide cells is that once they overheat due to a short circuit caused by a manufacturing fault or mechanical damage, they catch fire and generate oxygen internally, so they are impossible to put out. There is an alternative technology based on lithium ion/phosphate, which is much safer, although there is a small penalty in terms of energy density.
