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This work presents a gearless wheel motor drive system specifically designed for fuel cell electric and hybrid electric vehicle propulsion application. The system includes a liquid-cooled axial flux permanent magnet machine designed to meet the direct drive requirements. Machine design implements techniques to increase machine inductance in order to improve machine constant power range and high-speed efficiency. The implemented technique reduces machine spin loss to further improve efficiency. Machine design also optimizes the placement of the magnets in the rotor to reduce cogging and ripple torque. An original cooling system arrangement based on the use of high thermal conductivity epoxy joining machine stator and liquid-cooled aluminum casing allows very effective removal of machine power loss. Design details and experimental results are presented.