The efficiency and performance of an electrical machine depend on the magnetic properties of its magnetic core, i.e., the rotor and stator core made of stacked and processed electrical steel laminations. Especially a mechanical cutting, also known as punching or blanking, deteriorates the magnetic material properties next to the cutting line due to induced residual stress. The extent of the deterioration depends on the amount of induced stress, which is affected by the mechanical material properties and the process parameters used during punching. For this reason, in this paper, the effect of punching parameter variations on the magnetic properties of eight different nongrain-oriented electrical steels is investigated by using a single-sheet tester. The magnetic property deterioration is discussed based on the specific loss and the maximum field strength increase. In addition, the impact of punching parameter variations on the efficiency and the local flux and loss distribution of a permanent-magnet synchronous machine is shown based on a finite-element analysis. This allows one to tailor the punching parameters toward energy-loss minimization. [ABSTRACT FROM AUTHOR]