Currently, permanent-magnet-type traction motors drive most electric vehicles. However, the potential demagnetization of magnets in these motors limits the performance of an electric vehicle. It is well known that during severe duty, the magnets are demagnetized if they operate beyond a ‘knee point’ in the B(H) curve. We show herein that the classic knee point definition can degrade a magnet by up to 4 grades. To prevent consequent excessive loss in performance, this paper defines the knee point k as the point of intersection of the B(H) curve and a parallel line that limits the reduction in its residual flux density to 1%. We show that operating above such a knee point will not be demagnetizing the magnets. It will also prevent a magnet from degenerating to a lower grade. The flux density at such a knee point, termed demag flux density, characterizes the onset of demagnetization. It rightly reflects the value of a magnet, so can be used as a basis to price the magnets. Including such knee points in the purchase specifications also helps avoid the penalty of getting the performance of a low-grade magnet out of a high-grade magnet. It also facilitates an accurate demagnetization analysis of traction motors in the worst-case conditions.