This paper demonstrates the impact of advanced, multiphysical material utilization on the efficiency of induction motors. Multifunctional utilization of the stator lamination in terms of integration of thermal and fluid-mechanical functions leads to significantly increased space for active material. Circumferential cooling combines multiphysical utilization of the stator lamination and significantly increased cooling surface. The paper shows that circumferentially cooled motors can reach the future premium efficiency class IE4 with the frame size of a standard TEFC motor.Index Terms -standard induction motors, premium efficiency, direct lamination cooling, circumferential cooling, advanced material utilization, thermal model.