This Small Business Innovation Research (SBIR) Phase I project will develop a design to increase efficiency of capacitor-start fractional horsepower multi-pole AC motors by 33%. Results will drive significant advantages for manufacturers by retrofitting motors into current industrial machinery to dramatically reduce electricity consumption and operating costs. The motor will also provide competitive advantage to manufacturers of new industrial machinery by reducing operating cost and increasing productivity. The average efficiency of small AC motors is 60%. Eddy currents and I2R losses are the primary losses and are in the form of heat. This project will determine feasibility of a design that dramatically reduces these losses thereby increasing efficiency to 80%. The approach will consist of developing algorithms that define the motor, novel rotor construction, use of soft magnetic composites, optimizing characteristics that leave the coil partially energized, and research supported by advances in material science and modeling. To increase competitiveness of industrial machinery, the anticipated results of research include a working model that will meet the following performance metrics: efficiency at or above 80%; temperature rise of 20 degrees C; envelope size reduced 50%; and comparable cost to standard available products. The broader (commercial) impact from this project could be increased efficiency of small motors from 60% to 80% while reducing operating cost and materials, substituting recyclable materials, and maintaining current manufactured cost. Increasing efficiency to 80% will save American manufacturers $3-$7 billion net present value and reduce energy use by 5.2-8.6 quadrillion BTUs. It will also reduce electricity generation by 40-67 million megawatt-hours per year and eliminate the need for 9-15 fossil fuel electric utilities. Reductions in operating cost and increased productivity will significantly benefit manufacturing companies, employees, and communities. Competing technologies increase efficiency by a mere 3% and increase cost by at least 21%. Commercialization will increase manufacturing productivity by retrofitting and enabling new machine designs that leverage increased efficiency, higher reliability, lower waste heat, smaller space, and faster precision control