The global use of lithium-ion batteries of all types has been increasing at a rapid pace for many years. In order to achieve the goal of an economical and sustainable battery industry, the recycling and recirculation of materials is a central element on this path. As the achievement of high 95% recovery rates demanded by the European Union for some metals from today’s lithium ion batteries is already very challenging, the question arises of how the process chains and safety of battery recycling as well as the achievement of closed material cycles are affected by the new lithium battery generations, which are supposed to enter the market in the next 5 to 10 years. Based on a survey of the potential development of battery technology in the next years, where a diversification between high-performance and cost-efficient batteries is expected, and today’s knowledge on recycling, the challenges and chances of the new battery generations regarding the development of recycling processes, hazards in battery dismantling and recycling, as well as establishing a circular economy are discussed. It becomes clear that the diversification and new developments demand a proper separation of battery types before recycling, for example by a transnational network of dismantling and sorting locations, and flexible and high sophisticated recycling processes with case-wise higher safety standards than today. Moreover, for the low-cost batteries, recycling of the batteries becomes economically unattractive, so legal stipulations become important. However, in general, it must be still secured that closing the material cycle for all battery types with suitable processes is achieved to secure the supply of raw materials and also to further advance new developments.