A three‐level neutral point clamped (3L‐NPC) voltage source inverter (VSI) topology can be advantageous in electric vehicles with a high DC‐link voltage and a high switching frequency. A bulky DC‐link capacitor is not an option; thus, the DC‐link capacitor's sizing considering the traction system characteristics is an important design step. This paper investigates how the DC‐link capacitor size of a 3L‐NPC VSI gets affected by the combination of the interdependent characteristics of an electric drive, such as its power factor, modulation index, current, and fundamental frequency, with the effects of the modulation methods. Five pulse width modulation (PWM) methods, of which three of them have an active neutral point potential control, are compared in terms of their neutral point potential (NPP) oscillations. Then, the size of the DC‐link capacitor is determined for each PWM method so that the NPP ripple is kept under desired limits at all operating conditions. It is shown that both the modulation technique and the electric machine characteristics influence the capacitor size. For example, electric machine design modifications can introduce more than a 30% reduction in capacitor size. Finally, DC‐link and NPP oscillations with different PWM methods are experimentally validated in a scaled‐down 3L‐NPC inverter.