Magnetic losses in static and rotating electrical machine cores, most commonly assembled from electrical steel strip or laminations, consume more than 5% of all the generated electrical energy. The origins of the losses and the merits and pitfalls of traditional approaches to separation into classical eddy current and hysteresis components are described. Physical and structural characteristics of nonoriented and grain‐oriented electrical steels that have the greatest influence on their losses are discussed. Limitations of present‐day approaches to measurement or computational analysis of flux distributions and losses in electrical machine cores are summarized prior to explaining the occurrence of additional eddy current losses due to practical factors, such as flux harmonics, mechanical stress, sheet edge burrs, and rotational magnetization occurring in core joints.