Electric cars will likely make up 90% of Volkswagen AG's VOWG_p.DE sales in Norway next year and could completely replace diesel and petrol engines in the Nordic country by 2023, the German auto maker's local importer said on Wednesday.

With a 2025 goal of becoming the first country to end the sale of fossil-fueled cars, oil-producer Norway exempts battery-powered vehicles from taxes imposed on petrol and diesel engines.

The policy has turned the country’s car market into a laboratory for global auto makers seeking a path to a future without internal combusion engines, vaulting new brands and models to the top of bestseller lists in recent years.

A record 61.5% of new cars sold in Norway last month were powered by fully electric engines, registration data showed, up from 42.4% for 2019 as a whole.

The debut last month of Volkswagen’s highly anticipated ID.3 model vaulted it to the top of the Norwegian sales ranking, outselling California-based Tesla’s Model 3 and Geely’s Polestar 2 from China, according to the Norwegian Road Federation.

In its 2021 fiscal spending plan on Wednesday, the Norwegian government extended its policy of zero tax on fully electric cars, providing predictability for auto makers.

“This allows us to be confident in saying we can hit 90% electric car sales next year,” said Harald A. Moeller AS, the Norwegian importer of Volkswagen cars, including the Audi, Skoda and SEAT brands.

“Customers will have access to an even greater selection of electric cars in most segments in 2021,” it added.

At the start of 2020, Harald A. Moeller set a 60% target for electric cars this year.