This master’s thesis aims to improve the circularity of the electric vehicle (EV) battery value chain, specifically focusing on sustainable waste management of Lithium-Ion Batteries (LIBs) in Europe, particularly Sweden. The research objectives include evaluating and proposing actionable recommendations to enhance circularity, addressing environmental impacts, and supporting the industry’s transition towards a sustainable business model aligned with the new European Union (EU) Battery Regulation, which aims to enhance recycling rates, reduce environmental impact, and secure the recovery of valuable materials. The key research questions addressed are: (1) What initiatives, technologies, or best practices are currently being developed to support circularity and sustainable waste management in the EV battery value chain? (2) How can the circularity of the EV battery value chain be enhanced, particularly in sustainable waste management for LIBs? (3) What environmental impacts, socio-economic opportunities, and challenges exist in a circular value chain in the EV battery industry? The methodology employed a mixed-methods approach, including a literature review and case study, stakeholder interviews, SWOT analysis and life cycle assessment (LCA) using Minviro LCA software to quantify and compare the environmental impacts of state-of-the-art industrial LIB recycling methods. Key findings indicate that several initiatives and technologies are being developed to support circularity, including advanced recycling technologies and second-life applications for batteries. Enhancing circularity requires regulatory support, technological advancements, and stakeholder collaborative efforts. The findings highlight significant potential for extending the lifecycle of EV batteries through re-use, re-purposing, and recycling strategies. The analysis reveals that advancements in recycling technologies and supportive regulatory frameworks can substantially reduce the environmental impact and improve LIB supply chain sustainability. Notably, the LCA results highlight that mechanical and hydrometallurgical recycling processes offer more favourable environmental outcomes than pyrometallurgical methods. Thus, it shows potential for lower environmental impact on greenhouse gas (GHG) emissions and resource depletion, alongside socio-economic opportunities like job creation and economic growth. However, challenges such as technological barriers, economic feasibility, regulatory compliance, and EV battery value chain complexities remain, and these must be addressed. The conclusions drawn from the findings recommend that a combination of regulatory support, technological innovation, and stakeholder collaboration is essential for improving the circularity of the EV battery value chain. The study recommends advancements in recycling technologies, developing efficient testing and certification processes for second-life batteries, and establishing clear regulatory frameworks to facilitate circular economy practices. These measures are crucial for supporting the industry’s shift towards a more sustainable and circular model, ultimately contributing to the EU’s climate neutrality goals by 2050.