The process of battery manufacturing is always improving, getting more storage with less lithium. So when a battery is recycled, it will actually produce more battery than the original battery, even with lithium losses.

We don't know how long that process will go on, but in any case the amount of lithium needed will be a steady state, assuming constant need for batteries. But much more likely we will see ever increasing demand for batteries, just as we do for steel or copper or whatever minerals power our current economy.

There is a chemical limit though to the storage/lithium ratio.