(Yicai) Nov. 2 -- The European Union’s recent decision to launch a safeguard investigation into imports of hybrid electric vehicles from around the world has drawn objections from several major trading partners, including the United Kingdom, South Korea, Japan and Türkiye. China, though, had reached a consensus with the EU through the China-EU Trade and Investment Consultation Mechanism earlier, securing relatively advantageous export arrangements.

The European Commission announced a safeguard investigation into imports of new hybrid passenger vehicles from the rest of the world on Oct. 30. EU imports of hybrid passenger cars surged 49 percent in mid-2026 from 2023 to 1.4 million units, according to the announcement. The Commission said the surge in imports poses a serious threat to local industries.

China, Japan, South Korea, the UK and Türkiye were the EU’s five largest sources of hybrid and electric vehicle imports by value last year, according to Eurostat data. The five countries combined accounted for 82.7 percent of the EU’s total imports with China alone representing 26 percent.

At a recent World Trade Organization’s Committee on Safeguards meeting, South Korea questioned whether the EU had reached an agreement with a particular country on quota volumes before formally initiating the investigation. The UK, Japan and Türkiye also voiced concerns about potential restrictions on imports.

Safeguard investigations are generally simpler and have shorter timelines than anti-dumping and countervailing probes, Shi Xiaoli, a professor at the Institute of International Economic Law at the China University of Political Science and Law’s School of International Law and director of the WTO Research Center at CUPL, told Yicai. However, safeguard investigations apply, in principle, to all import sources of related products, meaning the EU’s other trading partners could also be affected.

Bilateral consultations between China and the EU before the investigation was launched were consistent with WTO rules, Shi said. The key issue in the negotiations was the quota baseline.

EU imports of hybrid vehicles from China surged 182.2 percent last year from the year before to 302,000 autos, according to Eurostat data. If the quota was calculated based on average annual imports over the three-year period from 2022 to 2024, China’s annual allocation would be approximately 70,000 vehicles. Even if 2025 were included in the calculation, the quota would amount to only around 150,000 units.

China managed to secure a favorable quota based on actual 2025 import volumes during the negotiations, but it was not easy, said Chen Huiqing, head of the legal department at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

Both sides also reaffirmed the principle of non-discrimination, under which the measures must not specifically target Chinese products or discriminate against Chinese companies. China’s quota allocation should also not be lower than that granted to other import sources, Chen said.

The EU has increasingly turned to safeguard probes in recent years, Shi said. Between 1995 and 2025, the bloc initiated just seven safeguard investigations. In 2026 alone, however, it has already launched two probes, covering grain-oriented electrical steel and new hybrid vehicles.

If the steel import restrictions extended on July 1 under the stated aim of addressing global overcapacity are also included, the number of safeguard investigations launched by the EU this year is actually three, she said.

The scope of safeguard investigations is gradually extending to upstream raw materials and components, increasingly reflecting an industrial-policy approach to protecting domestic industries, she said.

Editor: Kim Taylor