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This paper proposes a method to evaluate induction machines for electric vehicles (EVs) and hybrid electric vehicles (HEVs). Some performance aspects of induction machines are also compared to permanent magnet synchronous machines (PMSMs). An overview of static efficiency maps is presented, but efficiency maps miss dynamic effects and under-predict induction machine efficiencies. The proposed evaluation method is based on dynamic efficiency under loss minimization and overall energy consumption over standard driving cycles that are provided by the U.S. Environmental Protection Agency. Over each of these cycles, the dynamic efficiency and drive-cycle energy are determined based on experimental motor data in combination with a dynamic HEV simulator. Results show that efficiency in the fast-changing dynamic environment of a vehicle can be higher than inferred from static efficiency maps. Overall machine efficiency is compared for rated flux, and for dynamic loss-minimizing flux control. The energy efficiency given optimum flux is typically five points higher than for rated flux. This result is comparable to published PMSM results. A PMSM is also used for comparisons, and results show that both machines can perform well in HEV and EV applications.