As a main driving force of electric vehicles (EVs), the losses of in-wheel permanent-magnet synchronous motor (PMSM) direct drive system can seriously affect the energy consumption of EVs. This paper proposes a loss optimization control strategy for in-wheel PMSM direct drive system of EVs which optimizes the losses of both the PMSM and the inverter. The proposed method adjusts the copper losses and iron losses by identifying the optimal flux-weakening current, which results in the PMSM achieving the lower losses in the whole operational range. Moreover there are strongly nonlinear characteristics for the power devices, this paper creates a nonlinear loss model for three-phase half-bridge inverters to obtain accurate inverter losses under space vector pulse width modulation (SVPWM). Based on the inverter loss model and double Fourier integral analysis theory, the PWM frequency is optimized by the control strategy in order to maximize the inverter efficiency without affecting the operational stability of the drive. The proposed loss optimization control strategy can quickly find the optimum flux-weakening current and PWM frequency, and as a result, significantly broaden the high efficiency area of the PMSM direct drive system. The effects of the aforementioned strategy are verified by both theoretical analysis and experimental results. (C) 2017 Elsevier Ltd. All rights reserved.