INTRODUCTION HITACHI is working on preventing global warming, recycling resources, and protecting the ecosystem with the goal of creating a sustainable society. In the field of global warming prevention, Hitachi is working on plans to build energy infrastructure with low carbon dioxide emissions and manufacturing products with low energy consumption. Based on sources such as the “Summary of Electricity Supply and Demand” published by the Agency for Natural Resources and Energy at the Ministry of Economy, Trade and Industry, annual electricity demand in Japan is about 999,000 GWh (2005 figures). Broken down by type of equipment, electric motors consume about 57% of all energy, lighting consumes 14%, and heating consumes 10%. Therefore, decreasing motor power consumption is a major issue. In the automotive industry, the shift to hybrid and electric vehicles is being accelerated by the depletion of petroleum resources. This is one of factors behind the strong demand for highly efficient electric motors and has led to the rapid development of permanent magnet motors that use rare earth magnets. This article describes the latest technologies and considers the issues facing the key materials used in these motors, especially permanent magnets, core materials, wire, and varnish, in terms of their role in reducing motor losses and minimizing the burden on the environment.