This paper deals with a new configuration of gearless wheel mounted drives of trams. It introduces profitable properties of interior permanent magnet synchronous motor (IPMSM) for the drive and designs its new control strategy. The proposed control is based on a field oriented control linked to a rotor flux and optimally utilizes the reluctance component of torque in order to achieve maximum motor efficiency in entire speed range. In accordance with proposed control, optimal parameters of the drive were determined. The proposed drive design and its control are verified by simulations of a tram propulsion unit prototype.