In this paper, a new approach to the optimized design of outer rotor Permanent Magnet Synchronous Motors (PMSMs) for in-wheel light electric vehicle (LEV) applications is presented. The optimized design study is based on various dimensions such as back iron depth, permanent magnet depth and air gap length. The novel method is developed to reveal the quality factor of design (QFD), which implies the maximum possible performance results, and determine the best possible design for in-wheel PMSMs for direct-drive LEV applications. Therefore, the thickness of the back iron, permanent magnet and air gap dimensions are altered accordingly to obtain an optimized design. This design study is conducted for an in-wheel PMSM that has rated values of 2.5 kW, 150 V, 900 min−1, and 24-slot/20-pole configuration intended for LEV propulsion. These designs are simulated in order to obtain the maximized combination of efficiency, shaft power, shaft torque and a minimized combination of total weight, iron losses, copper losses, input current and cogging torque. The measure of the optimized parameters is named QFD, which indicates the goodness of the design through the use of radar charts. The values of the essential coefficients of QFD may vary for different applications, e.g., the design of PMSMs used in traction applications has some certain criteria that imply high-performance operation. Additionally, the QFD can guide motor manufacturers as a starting point for a design study.