Understanding Electric Vehicle Adoption in Portugal: The Role of Primary and Secondary Markets in Shaping Municipal-Level Dynamics and Policy Interventions

CEGIST, Instituto Superior Técnico, Universidade de Lisboa, Av. Rovisco Pais 1, 1049-001 Lisbon, Portugal

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Abstract

Electromobility represents a crucial strategy for mitigating CO₂ emissions in the transport sector, with government incentives and subsidies playing a pivotal role in promoting widespread adoption. However, the improper design and application of these subsidies may result in unintended negative consequences, such as discouraging the resale of new electric vehicles into the used car market. This secondary market constitutes the largest segment of the light passenger vehicle market, accounting for over 85% of total share and is therefore critical for the overall diffusion of electric mobility. We examine the adoption stages of electric vehicles across municipalities in mainland Portugal, classifying them into early (5%), critical mass (25%), and advanced (>50%) phases. Additionally, we demonstrate the interplay between primary and secondary markets, highlighting the significant influence of the latter on adoption dynamics due to its larger size and lower level of development. The findings offer a basis for developing more focused and effective policies aimed at accelerating decarbonization, emphasizing that incentives should be directed towards encouraging companies to rapidly replace their EVs, thereby helping to supply vehicles to the used market. Additionally, stricter quality control of used vehicles must be ensured, along with support for the importation of used EVs.