There's already multiple companies making cash flow positive money, without government subsidies, on recycling the very few EV batteries that are on the market (keep in mind that most EV batteries that have been manufactured are currently still in EVs). This is a great mini-documentary from CNBC on EV battery recycling: https://www.youtube.com/watch?v=xLr0GStrnwQ
It's just not economical to just dump EV batteries so I find this common fear to be rather unfounded and I personally suspect it's rooted in campaigning by oil companies to prevent EV adoption.
(I also suspect a significant portion of the "what about EV externalities?!" concern got seeded by the oil industry.)
Governments need to realize that just pushing EV is not going to make it alone.
Further, even with a high CO2 content electricity grid it is still cleaner to produce that electricity in power plants, because of the significantly more efficient burning that happens in large power stations versus the over 50% of energy wasted in an internal combustion engine.
In Mexico's case though with it's high natural gas content grid, switching to EVs is vastly better for CO2 pollution and general road pollution in general.
Old lead battery are highly recyclable but AFAIK the type used in EV's (and in many electronic devices such as laptops and phones) such as Li-Ion are not (easily) recyclable right now.
Hopefully by the time discarded batteries will increase in number there will be solutions, but right now there are only some "pilot" plants/technologies, see:
https://www.bbc.com/news/business-56574779
And: