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The design optimization of permanent magnet synchronous motors has long been a topic of major interest due to the widespread industrial use of such machines. Although there are a number of commercially available design tools to aid in such a task, the application specific nature of submersible motors has prompted the current interest. A new design consideration, the air gap viscous drag loss, will be shown to have a significant impact on the fluid immersed motor's losses. The conflicting nature of this loss component with the machine's electromagnetic design was presented. Finite element (FE) analysis using computational fluid dynamics software will aid in the understanding of the concept. An electric motor design procedure that takes this loss component into consideration illustrates the need for coupled field analysis in the design of submersible motors. Experimental results were used to corroborate the presented theory and illustrate the initial motivation for this study.