Market???
With the massive State and Federal subsidies, there is no 'market.'
First I would say you are mistaking the term “market” for “free market”. Even when you have a situation with massive government subsidies and regulations, there is still a market and market forces apply. It is just not a simple supply and demand system.
Also, in this case, we are talking about the market for the elements that are used to make the batteries, not the EV market.
As the demand for these minerals increase (even demand driven by subsidies for EVs), the price of the supply will increase. Once that price hits a level where obtaining them via recovery becomes economically feasible, an industry will form around that.
If there is an opportunity to make money from battery recycling, someone is going to do it. Right now there isn’t one. But as demand increases and the price of mined minerals increase, the system will reach a new balance point.