An efficiency optimization method of permanent magnet synchronous machine for electric vehicles applications is researched. Considering iron loss equivalent resistance and direct torque control scheme, the relationship of stator flux and power loss is derived based on loss model. And then the real-time optimal target flux can be obtained through the relationship of d-axis stator flux, target torque and electric speed at the minimum loss situation. A fitting curve of iron loss equivalent resistance versus speed is obtained by simulation. This makes the iron loss equivalent resistance closer to the actual value compared with the fixed value. Simulation results show that the motor efficiency has been improved compared with traditional direct torque control.