They made a verbal agreement in August 1924 at the Sturehof restaurant in Stockholm, then signed a written contract more than one year later, on 16 December 1925.

Gabrielsson took the economic risks himself and Gustav, in the worst case, would have worked on the project without being rewarded, but still would have had his salary from AB Galco in Stockholm.

Most of the capital that Gabrielsson intended to use for the project initially was actually extra sales commissions that he had saved from the time he was the managing director for the SKF subsidiary in Paris in 1921–22.

Gabrielsson had decided to build a test series of ten vehicles with his own financing and later present the car and an entire investment plan to SKF.

Larsen and Gabrielsson took it and drove themselves, on bumpy roads, down to SKF in Gothenburg to show the SKF-board and now present the final investment plan.

At a board meeting held in Hofors, Sweden, on 10 August 1926, SKF decided to use the old subsidiary company Volvo AB, for the automobile project.

AB Volvo, that was first registered in 1915 on the initiative of Björn Prytz, was originally set up to be used for a special series of ball bearings for the American market but it was never really used for this purpose.

A contract was signed on 12 August 1926 between SKF and Gabrielsson, stipulating that all ten prototype cars, engineering drawings, calculations etc.

Gustav Larson was appointed vice president and technical manager on 1 January 1927, and left his employment at AB Galco in Stockholm.

Björn Prytz and Gabrielsson managed to convince the SKF board to call the deal off, just one day before Charles Nash arrived by boat in Gothenburg.

The company now stood on solid ground and the production of both cars and trucks continued to increase for the rest of Larsen's life.