This study employs a DID methodology to estimate the effect of China’s whitelist policy for battery industry, both on firm stock prices and firm performance. The results imply that the policy has some significant positive effects on stock prices. According to the results of the Dynamic Average Treatment Effect and the Group Average Treatment Effect, the whitelist policy has had a significant positive im- pact on the stock prices of the firms listed during the [-30,30] and [-50,50] event window periods, as well as in the second and fourth batches. The non-significant effect observed in the first batch may be due to market expectations. Then the study further investigates the policy’s effect on the firm performance and observes a reduction in revenue for Japanese and Korean battery suppliers, attributable to their exclusion from the Chinese market. This exclusion aimed to enhance the market share of domestic battery suppliers, but the policy implications are nu- anced. While it potentially boosts local industry market share, it also appears to dampen technological innovation due to reduced competition. The findings con- tribute to understanding the market dynamics and investor behavior in response to government policy interventions in the electric vehicle battery sector.