The Hyundai driver ended the morning loop of stages with a 3.7s lead over Toyota’s Esapekka Lappi, while a strong run from Pierre-Louis Loubet put the M-Sport driver third, 8.9s adrift.
M-Sport’s Craig Breen headed to service in fourth ahead of Hyundai’s Dani Sordo, while Thursday’s leader Neuville saw his rally hopes fade on the morning’s final stage.
Championship leader Kalle Rovanpera completed the stages in eighth having had to sweep the roads, but was lucky to avoid a crash on Stage 5.
Fears intense heat would affect the drivers were allayed briefly for the Friday’s opening stage at least, but dust hanging in the air posed visibility issues described as “dangerous” by the majority of the crews.
The issue was made worse by reduced three minute intervals between cars that left plumes of dust in the air.
Despite the conditions, Evans won the day’s first stage to leap into the rally lead as Neuville, who was the first to cross the dust and shipped 15.1s, dropping to seventh overall in the process.
“There is no visibility at all, we lost up to 10-15 seconds in the dust we had to slow down completely," said Neuville. "It was known before and we mentioned it to the FIA to the organisers before the rally.
“At the end for the day it is really dangerous for the drivers.”
M-Sport’s Loubet emerged as Evans’ nearest rival on the stage, ending the test 0.8s slower ahead of Tanak and championship leader Rovanpera.
However, Evans' hopes of maintaining the lead were dashed on Stage 3 when the Toyota driver suffered a water leak in a compression which ended his day prematurely.
"Disappointed to retire so early after an unexpected impact in a compression, especially as we had a good start and an early lead," tweeted Evans. "The team will investigate the damage further in service."
The Welshman’s early exit promoted Toyota teammate Lappi from fifth overall into the lead, as the Finn won Stage 3 by 3.4s from M-Sport’s Breen, while Tanak dropped 5.3s.
The stage produced more drama as M-Sport’s Gus Greensmith suffered a half spin, losing almost two minutes as he recovered the car, while teammate Loubet dropped time overshooting a junction.
The rally lead changed for a fourth time in as many stages as Tanak surged to the front after posting the second-fastest time on the stage, despite damaging the front left of his i20 N after a rough landing from a jump.
The Estonian was 0.9s slower than Hyundai teammate Dani Sordo, who became the fourth different stage winner of the event so far.
Lappi could only manage the fifth-fastest time that resulted in the Finn surrendering his lead.
Meanwhile, Rovanpera was lucky to avoid a crash when he ran wide at fast right hander that resulted in the Finn losing a large section of his rear wing that would hamper his pace.
Breen and Greensmith also dropped time on the stage as both overshot at the same junction, the former managed to pull his Puma up in front of a crowd of spectators.
Sordo ended the morning loop by winning Stage 5 to climb to fourth overall, but it was Tanak that headed back to the Alghero service park with a lead over Lappi.
Tanak’s margin could have been reduced had Lappi not picked up a front-left puncture on the stage. Adrien Fourmaux also suffered a similar fate, while Neuville dropped to ninth after suffering a transmission issue that cost the Belgian 1m48s.
Crews will face four more stages this afternoon.
