This review focuses on standard Li recycling approaches for LiFePO₄ (LFP) and nickel−cobalt−manganese (NCM) cathodes. The study discusses about advances in leaching agents, including organic acid, alkaline solutions, natural organic acid, and electrochemical treatments. Emphasis is placed on the significance of selective Li leaching strategies to optimize the recycling of waste batteries. The review also outlines potential future research directions for enhancing selective recycling, providing valuable insights into the recycling of LFP and NCM batteries. Simultaneously, the article addresses the challenges associated with the transition from conventional lithium-ion batteries to all-solid-state batteries (ASSBs) in the pursuit of sustainable energy storage technologies. It highlights key points, including the challenges in developing ASSBs, the role of employing various material combinations and its preparation techniques, adopting scalable solution-based processes for commercialization, and strategies for sustainable ASSB recycling. The proposition of a fully recyclable ASSB model underscores the commitment to lower recycling costs using safer and simpler methods, positioning nanotechnology as an enabling tool for achieving advancements in materials and cell-level performance.