From my understanding NiMH batteries (Nickel Metal Hydride) are easily recycled with the plastics being removed, the Hydrogen recovered and the Nickel recovered by using a vacuum chamber. The reason for the vacuum is the ability to keep the volatile Hydrogen from exploding during the processing.

The value of the nickel alone will pay for the recycling.

The environmental impact is minimal and the saved emissions by using a Hybrid far outweigh not using a Hybrid vehicle.

Your politician is wrong and needs to be reeducated.