China has the highest automobile ownership and lowest recycling rates of end-of-life vehicles (ELVs) in the world. Due to the incompatibility that exists between environmental and economic objectives, the non-standardization of the dismantling industry has seriously affected its development. Therefore, from three aspects of scale, technology, and depth, we conducted a life cycle assessment (LCA) and established a cost-profit model to assess the potential environmental burden and economic benefits of the dismantling process, including equipment and plant factors. Targeted policy development suggestions for the government and ELV dismantling industry were proposed. The results show that three aspects all significantly impact metal and fossil-fuel depletion and climate change. The large-scale and mechanical_80% modes yield the greatest environmental benefits. Power consumption during the fine disassembly and crushing steps, acetylene used in manual_80% dismantling factory, and internal and external ELV parts are important factors influencing the environmental burden. The large-scale and manual_80% modes and the reuse of internal and external parts are the main sources of profit. Both environmental and economic benefits can be significantly improved by optimizing the efficiency of fine disassembly, crushing, and purification equipment, by undertaking non-destructive dismantling of internal and external parts and by abandoning gas cutting. This study provides clear and comprehensive future directions for the Chinese ELV dismantling industry.