<p>Battery recycling is essential to mitigate resource depletion and improve environmental sustainability. However, conventional metallurgical and direct regeneration methods involve trade-offs among energy input, environmental impact, and feedstock adaptability. Here we report a universal upcycling method that converts spent LiCoO₂ into Li₆CoO₄ within 10 seconds via flash Joule heating, achieving complete lithium and cobalt recovery regardless of degradation state. The resulting Li₆CoO₄ serves as a high-capacity sacrificial additive to offset active lithium loss. To overcome its inherent air sensitivity and oxygen release during delithiation, a conformal sulfur coating was applied to stabilize surface chemistry and redirect oxygen evolution into sulfate formation. This sulfur-mediated mechanism effectively suppresses gas generation and parasitic side reactions, enabling non-destructive lithium replenishment. When integrated into graphite | |LiFePO₄ pouch cells, the stabilized Li₆CoO₄ achieves 91.4% capacity retention over 1400 cycles at a current density of 80 mA g⁻¹. Comparative life-cycle and techno-economic analyses reveal clear reductions in energy consumption and CO₂ emissions, along with improved economic returns. This work provides a scalable route that bridges positive electrode waste recovery with high-performance lithium supply, advancing closed-loop battery systems for sustainable energy storage.</p>