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High power density is the main advantage of the axial flux motors compared to the conventional radial flux motors. Therefore, they are suitable candidates for the power train of hybrid electric vehicles. In addition, operating speed range and efficiency of axial flux motors can be improved by changing the air gap of the machine. In this paper, for each operating point, the optimal air gap is estimated based on the measured efficiency at different air gaps. The motor model is developed using the estimated optimal air gap and efficiency. Vehicle performance with the axial flux motor is also simulated based on the developed motor/controller model. Furthermore, the actual motor performance in a typical vehicle environment is analyzed with a vehicle simulator by applying the concept of hardware in the loop without installing the motor in the vehicle. Actual motor performance is compared with the simulation results as well. Motor performance in different drive cycles is also tested. The test motor can be used for the drivetrain of a series hybrid electric vehicle.