Due to their high efficiency and small volume, permanent-magnet synchronous motors are and will be widely used in current and future hybrid and electric vehicles. As an essential component of the power train system, electric motors should be continuously monitored to ensure driving safety and the efficient use of the electrical energy available on board. Effective methods are necessary to realize both a high-precision end-of-line parameterization of the electrical machine and the on-board diagnostics to detect derating or failure. Because most mechanical, magnetic, and electric faults cause increasing energy losses, the survey of the energy efficiency of the electrical machine is an appropriate approach for diagnostics. This paper shows a practical method for characterizing the electrical machine and for the sensitive detection of mechanical and electromagnetic deviations.