Except that the recycling ... cycle is not perfect. Far from it. I'd reckon maybe half of all lithium ends up in recycling. Other half probably ends up in the landfill. For instance, I picked up a broken ebike from the trash not long ago (Amsterdam). Battery still in it. Same goes for lots of smaller electronics.

That's true, but seems unlikely to be an issue for EV batteries. Cars are large and valuable enough that there are established businesses that deal with scrapping them.

That changes rapidly as EVs and grid storage take off. 99+% of those will be recycled and those will make up the bulk of lithium battery consumption.