Portugal’s automotive sector hits almost €46 billion in 2024, says ACAP - the debate on Auto Rádio

Almost €46 billion in turnover: that was the record figure posted by Portugal’s automotive sector in 2024. It was a year defined by rising revenue, more jobs and a sharp surge in electric vehicle sales. Data released by ACAP – Associação Automóvel de Portugal underlines just how strategically important the industry remains to the national economy.

Yet the picture is a contradictory one. Even as the sector expands, people in Portugal are replacing their cars less often, and the vehicle fleet continues to age. Around 1.6 million vehicles that are more than 20 years old are still on Portuguese roads, raising questions about the true pace of renewal and the energy transition.

Against this backdrop, ACAP has once again argued for a new Scrappage Incentive Plan alongside a reform of automotive taxation. The association is proposing lower tax at the point of purchase, with higher taxation spread across the vehicle’s usable life. In this episode of Auto Rádio, a Razão Automóvel podcast supported by Pisca Pisca, we dig into the underlying issue: how to make cars more affordable without undermining tax revenue or environmental goals.

The automotive sector in Portugal

The discussion opens with the headline figures. The automotive industry remains one of the main drivers of Portuguese exports, supported by thousands of companies involved in manufacturing, distribution and the sale of vehicles and components.

It does not take long, however, for attention to shift to the other side of the equation: the consumer. In Portugal, taxes make up a significant share of a car’s final price. Between ISV (Vehicle Tax) and IVA (Value Added Tax), the tax burden at purchase plays a decisive role in whether people buy a car - or put the decision off.

This is the context for the reform ACAP is advocating: easing taxation at the moment of purchase and strengthening a model in which tax is more closely tied to use and ownership. This episode explains what is at stake.

Scrappage incentive

With the vehicle fleet ageing steadily - the average age of vehicles in circulation was above 14 years in 2024 - and with mounting pressure from European environmental targets, ACAP has put forward a specific proposal: to create a new scrappage incentive programme capable of removing 40,000 older vehicles from the road as early as 2026. Is this the approach Portugal needs? And should the incentive apply only to new cars, or also include newer used vehicles that emit less pollution?

The debate intersects with another key trend: the growing share of imported used cars. In 2025, Portugal brought in 120,787 used vehicles from abroad, a new all-time high and the equivalent of 53.7% of new registrations. The issue is that imported used vehicles average 7.9 years old, and more than a third are between five and 10 years old.

Electrification and inequalities

Electrification also sat at the heart of the conversation. Portugal records one of the highest shares of electric vehicles in overall sales: 23.2% in 2025. This is a clear sign that the energy transition is under way. Even so, adoption remains concentrated among certain income groups and in areas with stronger charging infrastructure coverage, pointing to a market moving at different speeds.

The figures only tell part of the story. Portugal’s automotive sector is strong, competitive and economically significant, but it faces a demanding structural challenge: balancing growth, environmental sustainability and consumer affordability. Between record turnover, scrappage incentives and cars that have spent more than two decades on the road, the country is confronting a decisive choice about the mobility model it wants to build for the future.

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