Li-ion batteries have gained great popularity among researchers and practitioners as an environmentally friendly energy storage solution for more environmentally friendly electric vehicles (EVs). However, because of the increased demand for Li-ion battery-powered EVs, and some issues with battery design, legislation, collection and sorting, recycling, and material recovery, achieving sustainable mobility through the circularity of Li-ion batteries is a major challenge. This study aims to identify the challenges as well as develop strategies for enhancing the circularity of Li-ion batteries in Sweden. Following a systematic literature review, two primary research questions were investigated: 1) what are the current challenges and opportunities for the circular economy in lithium-ion battery end-of-life management? 2) how the circularity of LIBs in Sweden could be enhanced? This study employed PEST and SWOT analysis, as well as 11 interviews with industry experts and researchers are performed, to determine the strengths, weaknesses, opportunities, and threats in the circularity of lithium-ion batteries in Sweden. Following that, various strategies were developed to address the identified challenges and improve the circular economy of these batteries. Finally, the developed strategies are validated through expert interviews, and various recommendations are outlined. The study's findings are significant and can assist policymakers, investors, and industry professionals concerned with the circularity of lithium-ion batteries in developing appropriate decisions and better planning for the Swedish transportation sector.