Flywheel systems based on fibre composites can have power densities which are significantly better than for electrochemical batteries. Hence, they have considerable potential for use as peak power buffers in drive-trains for electric and hybrid vehicles. As the rotational speed is increased, however, bearing friction power loss and iron losses in the motor/generator become more significant. Thus, high-speed flywheels are conducive to the use of magnetic bearings and an air-cored machine topology. The design of a high-speed flywheel peak power buffer unit based on a carbon fibre composite rim, supported by a magnetic bearing system and incorporating an air-cored permanent magnet brushless motor/generator, is described. The potential for using rare-earth permanent magnet composite materials for the rotor of the brushless machine, and for using a soft magnetic composite for the rotors of the active magnetic bearings, is considered.