The dynamic eccentricity fault (DEF) of the interior permanent magnet synchronous motor (IPMSM) is mainly caused by external mechanical shock. In the case of DEF, an unbalanced magnetic force occurs because the length of the air gap is not constant. Noise and vibration of the motor occur due to unbalanced magnetic force. In addition, since the length of the air gap is not constant, the distribution of magnetic flux density is distorted, and iron loss is increased. As the iron loss increases, the temperature rises, and an irreversible demagnetization fault (IDF) of the permanent magnet occurs due to overheating. Therefore, in this paper, the fault mechanism of IDF due to DEF of IPMSM for electric vehicle (EV) traction is analyzed. Initially, the magnetic flux density and iron loss characteristics according to the healthy condition and DEF condition are analyzed using the finite element method (FEM). Then, the detailed iron loss analysis is performed based on the phase current waveform measured through the load test of the motor. Finally, the fault mechanism of IDF due to DEF was verified through an electric-axle load test on a manufactured motor having eccentricity.INDEX TERMS Dynamic eccentricity, electric vehicle (EV), interior permanent magnet synchronous motor (IPMSM), iron loss, irreversible demagnetization.