Reuse and recycling of retired electric vehicle (EV) batteries offer a sustainable waste management approach but face decision-making challenges. This study presents a strategy to optimize pathways of retired battery treatments economically and environmentally using a process-based life cycle assessment method. The strategy is applied to various reuse scenarios (energy storage systems, communication base stations, low-speed vehicles) with different capacity configurations and evaluates hydrometallurgical, pyrometallurgical, and direct recycling considering battery residual values. Results show that for the optimized pathway, LFP batteries improve profits by 58% and reduce emissions by 18% compared to hydrometallurgical recycling without reuse, while NMC batteries boost profit by 19% and reduce emissions by 18%. LFP batteries offer superior long-term benefits through reuse before recycling, despite NMC batteries having higher immediate recycling returns. The study provides an accessible evaluation framework for optimal pathway selection of retired EV batteries.