The demand for lithium-ion batteries (LIBs) is growing exponentially, driven by an increasing variety of applications, including consumer electronics, stationary energy storage, and especially electric vehicles. To meet this growing demand, recycling becomes essential because it not only reduces the environmental impact of LIBs but also addresses the shortage of lithium and other valuable metals, such as cobalt, nickel and manganese. This work proposes a technique for the direct recycling of lithium-ion battery cathode materials using electrical discharge in a liquid. Plasma in a liquid creates unique opportunities for purification and restoration of the electrochemical activity of cathode materials due to a combination of physicochemical (irradiation, shock waves, temperature, hydrogen bubbles) and electrochemical (solvated electrons and hydrogen atoms) processes. The result of this treatment is purified cathode material from the conductive additive and binder, with a reduced lithium content. This improves the power characteristics and cycling stability. The processed cathode material demonstrated ∼90 mAh·g−1 at a discharge current of 0.1C and ∼50 mAh·g−1 at a discharge current of 3C, as well as capacity retention after 500 charge‒discharge cycles with a current of 0.25C greater than 90 %. © 2024 Elsevier B.V.