The increasing adoption of electric vehicles (EVs) has led to a surge in end-of-life (EOL) lithium-ion batteries (LIBs), necessitating efficient recycling strategies to mitigate environmental risks and recover critical materials. This study compares the EV battery recycling frameworks in China and the United States, focusing on policy effectiveness, technological advancements, and material recovery efficiencies. China’s extended producer responsibility (EPR) policies and 14th Five-Year Plan mandate strict recycling targets, achieving a 40% battery recycling rate with 90% material recovery efficiency. Hydrometallurgical methods dominate, reducing energy consumption by 50% compared to virgin material extraction. The US, leveraging incentive-based mechanisms and private sector innovations, has a 35% recycling rate but a higher 95% resource recovery efficiency, mainly due to direct recycling and AI-based sorting technologies. Despite these advancements, challenges remain, including high recycling costs, inconsistent global regulations, and supply chain inefficiencies. To enhance sustainability, this study recommends harmonized international policies, investment in next-generation recycling technologies, and second-life battery applications. Emerging innovations, such as AI-driven sorting and direct cathode regeneration, could increase recovery efficiency by 20–30%, further reducing lifecycle costs. By integrating synergistic policies and advanced recycling infrastructures, China and the US can set a global precedent for sustainable EV battery management, driving the transition toward a circular economy. Future research should explore life cycle cost analysis and battery reuse strategies to optimize long-term sustainability.