The aim of this study is to present a magneto-thermal analysis of an external-rotor permanent magnet synchronous machine based on finite element method. The developed model can be used to predict temperature distribution inside the studied motor during the rated operation. Electromagnetic computation is carried out with the aid of two 2D finite-element (FE) simulations on the cross-section of the PM motor. In addition, the magnetic core losses of the stator and rotor are modelled based on the results from the electromagnetic analysis and a post-processing formula based on the loss-separation principle. After the loss calculation, the temperatures of the machine are calculated by using 3D finite element method. The results obtained by the model are compared with experimental results from testing the prototype electric motor.