In China, the number of newly registered electric vehicles (EVs) has been growing steadily each year, especially since the issuance of the Implementation Plan for the Extended Producer Responsibility (EPR) System. However, the country has not yet established clear standards for the recycling rate and management of retired new energy vehicle (NEV) batteries. Therefore, under the EPR system, how to select appropriate recycling and reuse methods to improve the efficiency of retired battery recycling and disposal is not only a current technical challenge but also an unavoidable environmental issue in the future. This paper discusses the key issues related to the recycling and reuse of used batteries within the EPR framework, such as the unclear delineation of recycling responsibility, poor recycling rates, and varying consumer preferences. The core of the paper lies in the analysis of stakeholder behavioral choices and a comparison of the efficiency of different recycling methods. It proposes four distinct recycling modes: the manufacturer’s independent recycling, commissioned recycling (outsourced to retailers and third-party recyclers), and joint recycling. The results of the model show that independent recycling results in a significantly higher waste power battery recycling rate compared to commissioned recycling. However, joint recycling proves to be the most effective method for achieving an optimal recycling rate. In terms of corporate profitability, joint recycling appears to be the most advantageous for NEV power battery manufacturers, even though retailers and third-party recyclers may not reap the same benefits. The influence of the market share of remanufactured products on the recycling and remanufacturing of NEV power batteries is contingent on the substitution effects of the two types of products. When product substitutability is low, an increased market share of remanufactured products can boost corporate profits; conversely, it can diminish profits. This study offers fresh perspectives for related research and provides a theoretical foundation for the development of efficacious NEV power battery recycling policies.