Estimation of parameters of Permanent Magnet Synchronous Motor (PMSM) plays an important role for motor controller tuning in Electric Vehicle (EV) application. Under running condition motor parameters vary due to different effects such as temperature, saturation and Voltage Source Inverter (VSI) non-linearities. Identification of parameters in running condition increases the control performance of system. This paper uses Extended Kalman Filter (EKF), which allows estimation of d-q axis inductances of PMSM. The control algorithm considered here is Field Oriented Control (FOC) for EV system having position sensor. The simulation is performed using MATLAB- Simulink software. The simulation results show that EKF identifies the d- and q- axis inductances Ld, Lq considering measurement and process noise using a state space model of motor equations for implementation.