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Summary: The electrification revolution in the automobile and other industries demands annual production capacity of batteries of at least 102 GWh, which presents a twofold challenge: supply of key materials such as cobalt and nickel and recycling when batteries are retired from use. Pyrometallurgical and hydrometallurgical recycling are currently used in industry but suffer from complexity, high costs, and secondary pollution. Here we report a molten-salt-based method for direct recycling (MSDR) that is environmentally benign and creates value on the basis of a techno-economic analysis using real-world data and price information. We also experimentally demonstrate the feasibility of MSDR by upcycling a low-nickel polycrystalline LiNi0.5Mn0.3Co0.2O2 (NMC) cathode material into Ni-rich (Ni > 65%) single-crystal NMCs with increased energy density (>10% increase) and outstanding electrochemical performance (>94% capacity retention after 500 cycles). This work may open opportunities for closed-loop recycling of electric vehicle batteries and manufacturing of next-generation NMC cathode materials.