They’re too valuable not to be recycled or reused ultimately. A battery not fit for an EV can either be refurbished with the dodgy cell replaced & then refitted to a car (See James do this to a Nissan leaf on YouTube) or they can be turned into off grid storage like tesla power walls or bought up & utilised by the national grid for balancing, smoothing power input effectively as a huge UPS for sensitive systems like industry
Of course theres always straight up recycling, only a matter of time until a factory can strip these down to individual component elements. Both cobalt & lithium can be reused infinitely so as long as we can get most of it back out we’ll be OK.
I think this is a short term problem really, once the glass electrolyte batteries are ready they don’t degrade from dendrite growth, they aren’t volatile & have a much much higher energy density so hopefully in a few years this won’t be so much of an issue.