This research paper offers a comprehensive evaluation of lithium-ion battery recycling methods, tracing the entire journey from global demand to the practical challenges and solutions for sustainable battery recycling. It starts with the analysis of worldwide LIB demand growth alongside the exponential growth in volumes of spent batteries and recycling rates. The study focuses on the imbalance in production and recovery of critical battery components and its environmental and economic effects. The paper then systematically examines six major recycling methodologies: mechanical, pyrometallurgical, hydrometallurgical, biotechnological, direct, and ion-exchange recycling. It goes into detail about their advantages, limitations, and roles in maximizing the recovery of valuable metals such as lithium, cobalt, and nickel. Traditional techniques like hydrometallurgical and pyrometallurgical methods, and emerging approaches including bioleaching and ion-exchange, are evaluated for their technical effectiveness and sustainability. Utilizing a multi-criteria decision analysis framework, the study compares these recycling methods across technical, environmental, and economic factors. The role of cutting-edge technologies, including automation and artificial intelligence, is also explored and discussed for their potential to optimize recycling processes, reduce chemical waste, and scale operations to meet escalating global demand. Pushing the transition toward circular economy models and closed-loop systems, this paper underscores the importance of emerging recycling solutions to preserve finite resources and build a resilient and sustainable LIB supply chain. The strategic recommendations are provided with the aim to guide industries and policymakers toward efficient, scalable, and environmentally responsible battery recycling technologies, which are critical for supporting the clean energy transition and future technological growth.