The rechargeable lithium ion (Li-ion) battery market was $11.8 billion in 2011 and is expected to increase to $50 billion by 2020. With developments in consumer electronics as well as hybrid and electric vehicles, Li-ion batteries demand will continue to increase. However, Li-ion batteries are not widely recycled because currently it is not economically justifiable (in contrast, at present more than 97% lead-acid batteries are recycled). So far, no commercial methods are available to recycle Li-ion batteries with different cathode chemistries economically and efficiently. Considering our limited resources, environmental impact, and national security, Li-ion batteries must be recycled. A new low temperature methodology with high efficiency is proposed in order to recycle Li-ion batteries economically and thus commercially feasible regardless of cathode chemistry. The separation and synthesis of cathode materials (the most valuable material in Li-ion batteries) from the recycled components are the main focus of this study. The results show that the developed recycling process is practical with high recovery efficiencies, and that it is viable for commercial adoption.