The authors have focused attention on an outer rotor permanent magnet vernier machine, ORPMVM, as a high-efficiency in-wheel machine. A general PMVM has two characteristics: generating a large torque in a lower speed, the torque per current is larger. These characteristics are suitable for a directly driven in-wheel machine. However, the machine structure of the PMVM causes much higher harmonics in its air gap flux density, and in the PMVMs with NdFeB sintered magnets, the magnets generate high heat by large eddy current due to own high electric conductivity even in a comparatively low speed range. In order to overcome that issue, the authors have employed NdFeB bonded magnet with high electric resistance and moreover have cleared two new issues: decreased torque by using bonded magnets, demagnetization due to armature reaction. As a result, the maximum efficiency obtained from a calculation based on FEA has exceeded 96 %.