Hybrid and electrical vehicles use mostly high-efficiency brushless permanent-magnet AC motors and sinewave drives. The motors utilize rare-earth magnet material and also are required to have a very high torque-per-rotor volume. The designs are now very well refined and often use interior permanent-magnet (IPM) rotors for a better field weakening control. This configuration has been shown to increase the efficiency. In this paper, the Toyota Prius 2004 motor is modeled using finite element analysis with different laminated steel materials in order to assess the effectiveness of using high flux-density steel versus the material volume. Additionally to the IPM rotor in the manufactured design, a spoke magnet rotor is also investigated. It is found that using high flux-density laminated steel will either increase the performance of the motor or allow the motor to be reduced in size (in this case, reduction in axial length).