Electric drives are very useful in propelling the wheels of hybrid and electric vehicles (HEVs). They also play a central function in the electric power steering (EPS). In this paper, a loss minimizing scheme for permanent magnet synchronous motor (PMSM) was derived analytically and takes into consideration copper, iron and stray losses. The proposed scheme is better than applying look-up tables and online search methods because it saves memory cost and is not limited by bandwidth constraints. Current control was achieved by the internal model control method. The performance of the resulting control scheme was simulated and was found to improve the efficiency of the EPS system.