Lead‐carbon batteries could provide better performance on high‐rate partial‐state‐of‐charge (HRPSoC) cycles than lead‐acid batteries (LABs), making them promising for the new‐generation of hybrid electric vehicles. The addition of carbon allotropes to the negative active material (NAM) could induce a significant improvement to the battery performance. Herein, an environmentally friendly strategy is demonstrated to prepare lead oxide and carbon (PbO@C) composite by pyrolyzing the lead citrate precursor derived from the spent lead paste of LABs. When the PbO@C composite is used as an additive to the NAM of lead‐carbon batteries, the utilization efficiency of the NAM is improved from 56.9% to 72.5%, and the cycle life of the cell in HRPSoC is tremendously extended by four times compared with the control one. The enhancement in battery performance is attributed to the hydrophilic carbon in the composite, which acts as a 3D electroosmotic pump facilitating electrolyte diffusion, and hindering the tendency to excess sulfation during the HRPSoC operation. This proposed research provides a sustainable and scalable strategy to recycle the discarded/spent LABs into high‐performance lead‐carbon batteries. An environmentally friendly strategy to prepare lead oxide and carbon (PbO@C) composites by pyrolyzing the lead citrate precursor recycled from discarded lead‐acid batteries (LAB) is demonstrated. This study will shed light on the development of the advanced electrode materials for lead‐carbon batteries and provide an alternative strategy to combine the recycling of discarded LAB with reutilization in next‐generation lead‐carbon batteries.