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It has advantages such as high power density and miniaturisation when the motor operates at high speed. However, as a side effect, the loss density is much higher than that of a constant speed motor. In addition, a retaining sleeve is inserted in the high‐speed motors to prevent the rotor from scattering. This insertion deteriorates the performance due to the increase of airgap, and eddy current loss occurs in the sleeve. In order to improve these shortcomings, the sleeve is redesigned in this paper. A groove was dug into the retaining sleeve and ferrofluid was injected. Ferrofluid refers to water or oil mixed with ultra‐fine powder. Since the permeability of ferrofluid is greater than that of airgap, it is possible to have high output and high efficiency. Since the material of the sleeve is non‐permeable, the performance is reduced with the same effect as increasing the airgap. However, if a ferrofluid is inserted by digging a groove in the retaining sleeve, the magnetic flux from the magnet flows into the stator through the ferrofluid, which has the same effect as reducing the airgap. Therefore, the torque density increases. Also, the eddy current loss is reduced through the retained sleeve groove. Moreover, a sleeve skew structure was used to further reduce the eddy current loss. In this paper, the mechanical rigidity at the rated speed was also taken into consideration. As a result, eddy current loss was reduced and torque density was improved. This is verified through the final finite element analysis. [ABSTRACT FROM AUTHOR]