Motors use over 60% of all electricity generated, and their losses exceed 200 × 109 kW.hr/year. A significant part of this loss results from eddy currents and hysteretic processes in the motor laminations. These so- called core losses cost motor users about $3 × 109/year. The metallurgy and economics of using various steels are considered, with emphasis on 5- to 125- hp polyphase induction motors. A lower core loss steel, even though it is more expensive, is economically justified most of the time when the operating costs of motors are considered. Impurities must be minimized, and steels can now be made with the principal impurities being less than 30 ppm. Further reduction of core losses depends on using the best steel processing equipment available, production of a consistently low carbon content so that decarburizing during the final anneal can be eliminated, developing a better understanding of the relation between material properties and performance in motors, and an increased willingness by the motor users to pay more for better motors that are cheaper to own in the long run.