The transition to clean energy and electric mobility is driving unprecedented demand for Li-ion batteries (LIBs), creating a need for sustainable manufacturing hubs and supply chains. The dynamic nature of the LIB market creates the need to account for the environmental impacts of value chains and technological options. In this direction, Life Cycle Assessment (LCA) is a crucial tool to support decision-making towards avoiding shifting environmental burdens from one part of the planet to another or diminishing current environmental problems to create new ones. A detailed and modular engineering-system inspired life cycle model for automotive traction LIBs was developed in this research. First, the LCA of LIB production component model was developed accounting for the environmental burdens of producing lithium nickel-manganese-cobalt (NMC) oxide batteries and quantifying the impact of the Chinese domination in LIB manufacturing. Novel NMC batteries were shown to exhibit similar threats to humans and ecosystems as the commercialised ones, occurring mainly from the metals used in the battery cells, with an obvious environmental benefit being realised due to their improved energy densities. The production of LIBs in China was shown to come at a high environmental cost of 40% higher Global Warming Potential (GWP) than earlier literature suggests. Second, an LCA and techno-economic analysis of LIB utilisation in electric vehicles was performed, accounting for different thermal management solution. It was demonstrated that by optimising the battery thermal management system, the battery life cycle cost and carbon footprint can be reduced by 27 % and 25%, respectively. Third, hydrometallurgical and pyrometallurgical recycling chains for spent automotive traction LIB packs were analysed and the respective LCA inventories were developed. Pyrometallurgical processing of spent automotive traction battery cells was shown to have a larger GWP, due to its higher energy intensity. Battery recycling was found to be highly beneficial from an environmental perspective, with a net benefit being achieved in 11 out of 13 environmental impact categories, as compared to battery production without recycling. Overall, this thesis provides quantitative evidence to enable the promotion of sustainability throughout the entire LIB value chain, as well as transparent and reproducible models for each stage of their life cycle.