Evans ran off the road on the 18.15km Mortagua stage seven while occupying sixth position following a challenging day opening the road.
A drought-breaking victory in Croatia last month meant the Welshman headed to Portugal tied at the top of the championship standings with part-time Toyota team-mate Sebastien Ogier, who isn’t competing in Portugal this weekend.
Evans had been struggling with the balance of GR Yaris throughout the day, having faced the worst of the road conditions.
Footage has now revealed that Evans went off the road at speed, resulting in a heavy collision into trees. The GR Yaris sustained heavy damage in the impact, which triggered a small fire that was quickly extinguished.
Evans and co-driver Scott Martin emerged from the incident unscathed and have since undergone medical checks.
After recovering the car, Toyota has now confirmed the damage is too severe to allow Evans to rejoin the rally to salvage points from Sunday’s Power Stage.
“Elfyn and Scott underwent medical checks after their accident and are both doing well," read a statement from Toyota.
“After inspecting the damage to car #33, the team has taken the decision to retire it from the rally.”
Speaking to media after successfully completing medical checks, Evans said: "We are both perfectly fine. We had a few checks last night which took some time but it all turned out well.
"The car has done its job really well. It was a really fast part of the stage and there were a couple of left handers together and I probably carried a bit more speed around the second one and there was some sand and I just slide ever so slightly wide into the bank and that pitched the car into quite an aggressive roll."
Friday proved to be a bittersweet day for Toyota as world champion Kalle Rovanpera completed the eight stages leading the rally by 10.8s from Hyundai’s Dani Sordo. The Finn, starting second on the road, won three of the eight stages.
Rovanpera was the team’s only car to navigate through the schedule as Takamoto Katsuta was forced to retire his third entry after suffering an alternator failure.
The problem emerged on the first stage and ultimately proved terminal after stage two. The Japanese will however rejoin the rally on Saturday.
“We had to manage it but we knew it was going to be difficult to continue as we knew everything would shutdown,” said Katsuta.
“I felt good with the car, but unfortunately the battery was completely gone before stage three.”
