We designed and analyzed an interior permanent magnet synchronous motor (IPMSM) to prevent irreversible demagnetization of the permanent magnets (PMs). Irreversible demagnetization of NdFeB PMs mainly occurs due to high temperature, which should thus be minimized. Therefore, it is necessary to reduce the eddy current loss in the PM through optimal design. The shape of the rotor core was optimized using finite element analysis (FEA) and response surface methodology. Three-dimensional (3-D) FEA is required for accurate computation of the eddy current loss, but there is huge time, effort, and cost consumption. Therefore, a method is proposed for indirectly calculating the eddy current loss of PMs using 2-D FEA. A thermal equivalent circuit analysis was used to calculate the PM temperature of the optimized model. For the thermal analysis, the copper loss, core loss, and eddy current loss in PMs were estimated and applied as a heat source. Based on the results, we confirmed the stability of the optimum model in terms of the PM demagnetization.