Digital twins, a product of new-generation information technology development, allows the physical world to be transformed into a virtual digital space and provide technical support for creating a Metaverse. A key factor in the success of Industry 4.0, the fourth industrial revolution, is the integration of cyber–physical systems into machinery to enable connectivity. The digital twin is a promising solution for addressing the challenges of digitally implementing models and smart manufacturing, as it has been successfully applied for many different infrastructures. Using a digital twin for future electric drive applications can help analyze the interaction and effects between the fast-switching inverter and the electric machine, as well as the system’s overall behavior. In this respect, this paper proposes using an Extended Kalman Filter (EKF) digital twin model to accurately estimate the states of a speed sensorless rotor field-oriented controlled induction motor (IM) drive. The accuracy of the state estimation using the EKF depends heavily on the input voltages, which are typically supplied by the inverter. In contrast to previous research that used a low-precision ideal inverter model, this study employs a high-performance EKF observer based on a practical model of the inverter that takes into account the dead-time effects and voltage drops of switching devices. To demonstrate the effectiveness of the EKF digital twinning on the IM drive system, simulations were run using the MATLAB/Simulink software (R2022a), and results are compared with a set of actual data coming from a 4 kW three-phase IM as a physical entity.