Game developer studio Namco had wanted to include a Tekken Force character to the series since Tekken 3. Lars' full name was proposed to the staff by an unknown woman from the Swedish embassy in Japan, years before Tekken 6 was developed. Tekken producer Katsuhiro Harada found it "cool" and immediately decided to use the name. Lars was finally introduced to Tekken 6 in an update titled Bloodline Rebellion. In early sketches, Lars was depicted as older than his in-game appearance, with a beard and a ponytail. Another rejected sketch featured Lars' complete Tekken Force design that covered his entire face and had a bigger cape. Unlike other new Tekken 6 characters who were based on fan input, both Lars and fellow newcomer Alisa Bosconovitch were created using a different approach, focusing on their importance to the game's story. As a result, in the arcade version of Tekken 6, most of Lars' identity was kept a mystery, leaving it to the console versions' Scenario Campaign mode to explain his role in the series, with Harada teasing about his potential attack of Jin Kazama's forces. In response to claims that the story of Tekken was complicated, Harada denied as he saw it as a "simple" struggle between members from the Mishima family and how multiple characters are dragged into this.
As with several other characters from Tekken 6, Lars was given an alternate outfit designed by a manga artist, with Lars' being done by Masashi Kishimoto, author of the manga Naruto. In redesigning Lars, Kishimoto removed his Tekken Force outfit and gave him one made of a soft rubber material, marked with a lion figure on his right arm. He also made multiple cuts for the belt on the back, so that Lars' kicking techniques would be possible. Also, on the outfit's back are the numbers for Sweden's telephone country code: "46". In the Wii U version of Tekken Tag Tournament 2, Lars has an extra costume based on Link from Nintendo's The Legend of Zelda series. For Tekken 7, Lars was given another look by Akira Nishitani, aka Nin-Nin. After multiple drafts that gave Lars different colors and accessories, Nin-Nin made one which retains elements from the Tekken Force design, while adding a torn red cape. For Street Fighter X Tekken, Lars retains his Tekken 6 outfit, but is also given an alternate ninja outfit.
Hiroshi Tanahashi served as the inspiration for Lars' extra Tekken 7
In October 2017, as part of a collaboration between Tekken's staff and New Japan Pro-Wrestling, it was revealed that Lars would be getting a new costume in Tekken 7, inspired by professional wrestler Hiroshi Tanahashi. When using this costume, Lars' theme changes to "LOVE&ENERGY" by Yonosuke Kitamura, and he is given a new move known as "Sling Blade". The costume was released in Japanese arcades on November 18, 2017, while the console versions obtained it as free downloadable content on May 31, 2018. After the collaboration, Tanahashi praised the resulting change in Lars' design, as well as the incorporation of his own moves.
Across all his appearances, Lars has been voiced by Junichi Suwabe, except for Street Fighter X Tekken, where he is voiced by Zach Hanks. Suwabe enjoyed voicing the character and expected his players to enjoy him in Tekken 7. He also commented about the Tekken 7 trailer where Lars and Noctis interact together. Lars appears in the Tekken Tag Tournament 2 live-action short film portrayed by Jonathan Henry.
Lars' fighting style is based on the Shorinji Kempo martial arts, and is also known as the "Tekken Forces Martial Arts" (鉄拳衆特殊部隊格闘術 Tekkenshū tokushu butai kakutō-jutsu). Lars' gameplay style was made to fit with those of older characters in the series. The developers called him "quick and agile" based on his varied moves, which were intend to give players multiple strategic possibilities and prevent them from being cornered against a wall. They also intended that Lars be easy to use by newcomers, making his moves "unpredictable for opponents". Designer Yuichi Yonemori mentioned that Lars' fighting style is effective for countering aggressive players, due to his speed, which allow players to avoid taking too much damage in combat.
GameSpy referred to him as one of the most "flexible" fighters but stated some of his combos were hard to execute. When Tekken 6 was first released, Namco Bandai received several complaints from fans about Lars being too powerful. Harada said that Lars' strength was intentional, and argued that every time a new character is introduced to the franchise, he might be perceived as stronger, as had happened with Akuma, who appears as a guest character in Tekken 7. Several of Lars' moves involve electricity, with one of his most powerful ones being named after Zeus (ゼウス Zeusu), the Greek thunder god. For Capcom's crossover game Street Fighter X Tekken, the official guide encouraged players to use Lars' strong kicks in order to cancel his enemies' special attacks and get close to the rival. In Ninja Storm 2, Lars is a close-up fighter, also featuring electricity-based moves in contrast to other characters who rely on projectile techniques.
Harada said he thought Lars remained the strongest character to use in fighting tournaments, though others claim Steve Fox and the Mishimas – Jin, Kazuya and Heihachi – were stronger. For Tekken Tag Tournament 2, Harada revealed that Lars had been rebalanced from Tekken 6 in order to better fit with the cast of this spinoff. A renowned Tekken player known as "JDCR" listed Lars as third tier in the Tag Tournament 2 ranks, a spot he shared with Jin, both being surpassed by Heihachi Mishima, Devil Jin and Kazuya Mishima. JDCR commented that Lars felt easy to use for newcomers, to the point of considering him "dangerous". On his Twitter account, Harada has often been asked by gamers to increase Lars' strength, which resulted in an internet meme titled "Buff Lars"; Harada refused to do it. According to Tekken 7 visual design manager Kousuke Waki, Lars was one of the characters they updated, but at the same time they saved some of the changes for the "Fated Retribution" update, in order to make the transition to Tekken 7 more welcoming for returning Tekken 6 players. On Fated Retribution, several of Lars' techniques were patched to increase the damage they cause. Famitsu commented on Lars' moves from Tekken 7, specifically referring to his great speed and his techniques, which provide him with good defensive and counterattacking options.
During the production of Tekken 7, Harada was impressed by the Swedish rock band BatAAr, and felt the game could benefit from their songs. The group originally met Harada during a Twitter conversation when one of the band members asked him where he could buy a Tekken action figure in Tokyo. Harada invited the group to dine with him and presented them with his idea. As Lars is half-Swedish, he asked the band to compose the character's theme song, which he hoped fans of the franchise would look forward to hearing when playing the character. The group then went to Japanese arcades to play Tekken 7 as Lars while listening to their own music, which they found fitting. Honored by the proposal, the band said Harada had given them complete freedom as long as the song included Swedish lyrics to fit Lars' nationality. Band member Patrik, responsible for writing the lyrics, made extensive research about Lars' role in the Tekken series, as well as fan theories about him, in an attempt to understand Lars' characterization in Tekken 7 and make the lyrics fit. BatAAr's theme song for Lars was ultimately titled "Vrede" (Swedish for "Anger"), and included in both a CD single as well as the original soundtrack of Tekken 7. The band took a liking to Lars to the point where all the band members played Tekken 7's tournament mode as him, singing "Vrede" during pauses.