I'm curious where you got those numbers from. I did a quick search and find wildly different numbers (depending on method and source, from ~60% to >98%).

However I don't find anywhere claiming anywhere near <5%. Can you back that up?

Example source of manufacturers claiming >95% [0].

0: https://climate.mit.edu/ask-mit/how-well-can-electric-vehicl...

"Despite their wide use, it is estimated that only 5% of lithium batteries are currently recycled."

https://www.ameslab.gov/news/new-lithium-ion-battery-recycli...

This is probably because it's not economical to recycle lithium ion batteries, certainly not for the lithium itself. Lithium is an extremely abundant element. If this ever stopped being the case, or if there are other battery components that were scarce enough to make batteries economical to recycle, we'd start doing that.

There's no virtue in recycling equipment for recycling's sake alone, we do it in exactly the situations where some raw material in the equipment is expensive enough to justify the cost of the recycling process.

Your argument can't be both that "the batteries are recyclable" and "well duh no one does it because it doesn't make any money."

Anything at all is recyclable if you're willing to spend enough money on the recycling process. If the raw materials of that thing are cheaper to get from nature than they are to get by recycling old versions of the item, then this is a good sign that it's not worth recycling the item and therefore we shouldn't do it.