Portugal Grants a Tax Incentive for Electric Cars, Motorcycles, and Bicycles

The Portuguese government has announced updates to the tax incentive programme promoting the adoption of zero-emission vehicles which could include cars, motorcycles and bicycles. In 2025, financial support for 100% electric cars will increase, while motorcycles and bicycles will also benefit from enhanced incentives.

Curious about how you can benefit from this exciting opportunity? Reach out to us!

For conventional bicycles, the incentive will more than triple, rising from a maximum of 150 EUR to 500 EUR. For electric bicycles, the incentive will cover 50% of the purchase price, up to a maximum of 750 EUR, representing a 50% increase from previous years.

Electric motorcycles will continue to receive 50% support on their purchase price, but the maximum incentive has tripled, increasing from 500 EUR to 1,500 EUR.

The acquisition of electric cars is subject to a price limit, which has been increased compared to last year’s threshold. For light passenger vehicles with more than five seats, the maximum eligible purchase price has been raised to 55,000 EUR. For vehicles with five or fewer seats, the limit is now 38,500 EUR. These amounts already include VAT and associated costs.

In 2024, the Portuguese government allocated 10 million euros for this tax incentive. However, due to a lower-than-expected number of applications, the full amount was not utilised. As a result, the unused funds have been carried over to 2025, increasing the total budget to 13.5 million euros. It is important to note that to qualify for this incentive, applicants must scrap a fossil fuel vehicle that is over 10 years old.

The tax incentive for electric cars is set at 4,000 EUR for individuals. For Private Social Solidarity Institutions (IPSS), other social organisations, local authorities, and transport authorities, the incentive increases to 5,000 EUR.



Applications for this tax incentive will open at the end of March 2025 and remain available until 30 November 2025, or until the allocated funds are fully exhausted.

To benefit from this tax incentive, applicants must meet the following requirements:

• The vehicle must be purchased between 1 January and 31 December 2025.
• The owner must retain the vehicle for at least 24 months.
• The vehicle cannot be exported.

Applications must be submitted online through the Environmental Fund website by completing the designated form and providing the required supporting documents, which vary depending on the type of vehicle. It is important to note that both the website and the application form are in Portuguese, requiring proficiency in the language.

This tax incentive aligns with Portugal’s broader sustainability goals by encouraging the transition to clean energy vehicles, improving air quality, and reducing noise pollution in urban areas.

If you want to take advantage of this tax incentive, contact us – we can handle the entire application process for you!