The electric mobility sector in Portugal has been facing an uncertain scenario regarding the continuation of electric vehicle (EV) subsidies since May.
According to recent statements by Manuel Reis, Vice President of the Board of Directors of the Electric Vehicle Users Association (UVE), “unfortunately, we do not have an update.”
“We are less confident that it will be reinstated this year, but the government still says that it is in evaluation,” he says to Mobility Portal Europe.
The Portuguese Environmental Fund, responsible for managing the grants for the purchase of zero-emission electric vehicles, has not provided clear indications regarding the continuation of the programme in 2024.
This situation has created significant uncertainty, both among consumers and key stakeholders in the sector.
The subsidies have been a fundamental pillar for the growth of electric mobility in the country, encouraging the adoption of clean technologies and facilitating the energy transition in transportation.
In 2023, the Fund had allocated ten million euros to the purchase of these vehicles, in addition to providing specific support for the scrapping of cars over 15 years old.
However, this year the incentive was not included in the financial plan.
This has led to a slowdown in electric vehicle sales in the first months, according to data from the Portuguese Automobile Association (ACAP).
In May, new electric vehicle registrations dropped by 6.8% compared to the same month the previous year.
A total of 3,147 new electric passenger vehicles were registered, a figure that contrasts with the growth the sector had been experiencing in previous years.
Meanwhile, sales of electrified light commercial vehicles fell by 33.7% in May 2024, with 118 units registered.
However, this trend was reversed in September, with an increase of 43.9% compared to the same month in 2023, with 4,053 new light passenger cars registered.
Electrified vehicle sales also saw a 25.4% rise compared to the ninth month of the previous year.
What is the sector’s response?
UVE, the organisation that represents EV users in Portugal, has repeatedly expressed the urgent need for the government to clarify its position regarding subsidies.
Manuel Reis argues that the grants must continue to maintain the momentum of the sector.
“We believe there is a budget reserved in the Fund that could be used for this, so it is simply a matter of political will to implement it,” he said.
He also pointed out that statements made by the former Minister of Environment, who confirmed the existence of the incentive, raised expectations among consumers.
As a result, many bought zero-emission vehicles based on those promises.
In May, the Ministry of Environment was reviewing the funding protocols of the Environmental Fund for this year.
With less than three months remaining in 2024, there are still no updates.
The lack of urgency in decision-making has been criticised by UVE and other sector stakeholders, who have expressed concern over the delay in opening the application forms, usually available in the early months of the year.
In this regard, Reis stressed that it is crucial for the government to act swiftly to prevent further deterioration of the sector.
“We do not consider the possibility of a setback at this stage, nor even a scenario in which these two incentive programmes are not implemented with the utmost urgency,” emphasised the Vice President of UVE.
The lack of incentives also affects the government
The continuity of the subsidies is not only vital for consumers but also for the government itself, which has promoted EV adoption for years as part of its emissions reduction strategy and efforts to combat climate change.
According to UVE, the incorporation of more electric vehicles into public fleets would be a crucial step not only from an environmental perspective but also in terms of Total Cost of Ownership (TCO).
This is because, in the long run, it is more favourable than that of traditional cars.
Moreover, the presence of more EVs on the roads would serve as a strong incentive for “late adopters,” those consumers who are more conservative about new technologies, to make the switch.
