Based on the new European driving cycle, a new optimization method is proposed to reduce the iron loss of the permanent magnet synchronous motor (PMSM) in the medium and high speed working range. A PMSM for new energy vehicle drive with a rated power of 35 kW is taken as the object. Firstly, considering motor cost and processing difficulty, auxiliary slots on the rotor are used to optimize the iron loss of the motor. Then, through the comparison of the harmonic contents of the air gap magnetic density under different working conditions and the observation of the magnetic density trajectory at the characteristic points of the stator, the effect of high-speed magnetic field distortion on the iron loss is fully analyzed. Furthermore, to reduce the motor iron loss, reasonable slots are designed, which can effectively cut down the air gap magnetic density harmonics, reduce eddy current loss, and optimize the iron loss density at the tooth tip. After optimization, the measured motor iron loss is reduced by up to 16%. Finally, load experiment illustrates that the proposed optimization method can achieve better performance.