German automaker Volkswagen and US EV manufacturer Rivian Automotive have announced the official start of the two companies’ joint venture. The news comes months after VW said that it would invest $5 billion in Rivian. That investment has now grown to $5.88 billion.

The JV will focus its efforts on the development of electrical architecture and vehicle software for a new line of software-defined EVs, including subcompact cars. The JV is expected to debut new EVs in 2027.

The JV is operating under the moniker Rivian and VW Group Technology. It will be helmed by Rivian software chief Wassym Bensaid and VW Group Chief Technology Engineer Carsten Helbing. The first teams to begin the work of designing a new line of EVs will be based in Palo Alto, California, while three other sites are said to be in development in North America and Europe.

The JV has already shown off a new prototype that began life as a VW test vehicle created by its engineering team over a 12-week period prior to the JV’s launch.

“We will be scalable, from the very small segment up to luxury cars and sports cars,” VW Group CEO Oliver Blume said. “The electronic architecture will be scalable and will be useable for a great volume of cars.”

Source: Rivian Automotive