The electric automotive transition is crucial for achieving carbon neutrality, especially in emerging economies like China. However, the scarcity of critical materials in lithium-ion batteries (LIBs) challenges electric vehicle (EV) deployment targets. Our work delivers a comprehensive framework of EV battery recycling, considering resource compensation, environmental performance, geospatial optimization, and cost feasibility of closed-loop LIB recycling under China's carbon neutrality. Our findings show that meeting EV deployment targets will widen the supply-demand gap, with cobalt and manganese demand exceeding 2022 production levels by 54-fold and 116-fold, respectively. Battery recycling is crucial for mitigating material scarcity, necessitating a minimum 84% collection rate to stabilize supply by 2060. Battery recycling remains economically viable in most scenarios, generating a net profit of US$58 billion in the optimal scenario. Here, our work underscores inherent trade-offs among integrated metrics, informing battery recycling strategies to strengthen supply chain resilience and advance automotive electrification under decarbonization goals.