A high demand for electrification of the transport sector has resulted in a need to provide compact and reliable electric power trains where the electric machine is a key element. The cooling system has a strong impact on the specific torque and power capability of the machine. The selection of the cooling solution should not be based on the steady-state cooling performance only but also on the transient characteristics owing to the typical operational load nature of the propulsion system, where the load is not continuous (as it usually is in industrial applications), but it frequently varies in time depending on the vehicle type and the driving style. This article investigates in detail the cooling capabilities of a direct winding liquid cooling solution and compares it with a traditional frame liquid cooling arrangement in the transient condition. As a result of the comparison, it was found that the location of heat removal close to the heat source makes the temperature transient time faster, which allows to apply overload operating points more frequently.