This paper investigates components of the mechanical loss together with heat transfer effects in an axialflux PM motor. The mechanical loss components generated within electrical machines are well known, however, their prediction or derivation has not been widely reported in the literature. These, together with the electromagnetic loss sources and heat transfer effects are crucial and must be accounted for when considering high-power density, high-speed and/or compact machine design. This research is focused on separating the mechanical loss components to gain a more in depth understanding of the effects and their importance. Both experimental and theoretical techniques have been employed in the analysis. In particular, hardware tests with dummy rotors have been performed to measure the bearing and windage/drag loss components. These have been supplemented with CFD analysis to theoretically evaluate the aerodynamic effects occurring within the mechanical air-gap accounting for loss and heat transfer. Further to these, a 3D lumped parameter thermal model of the axial-flux PM demonstrator has been developed to validate predictions of the mechanical loss components and heat transfer mechanisms. The theoretical findings show good agreement with experimental data. Moreover, the research outcomes suggest that the mechanical and aerodynamic effects require careful consideration when a less conventional machine design is considered. I.