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Permanent magnets are commonly used in electromechanical energy conversion devices, especially in permanent magnet synchronous machines (PMSM). When designing such devices, it is necessary to take account for the operating conditions of the permanent magnets. Ideally, the operating point of the magnet lies on a linear reversible demagnetization characteristic. Nevertheless, the operating conditions (temperature, demagnetization field, etc.) may have great influence on the magnetic characteristic that becomes strongly nonlinear and may lead to magnetization loss in the magnet. Consequently, the impact is also observed on the electrical machine performances. This paper presents a nonlinear model accounting for magnetization loss of permanent magnets which magnetic characteristic presents knee points in the demagnetization curve. The presented model is applied to analyze the local magnetization loss in magnets of a PMSM.