Canned electrical machines as hydraulic pump drives are widely used. Such a machine has quite a difference in electromagnetic properties due to the can shield in air gap, causing essential can effect, which is investigated in this paper. A canned 12–10 permanent magnet (PM) electrical machine with tooth concentrated coils is studied. An analytical model with a concentric-layer structure is developed. The air-gap flux variation due to the can effect and then ohmic losses from cans (can loss) due to PMs and armature windings at typical operating condition are studied, respectively. Loss and output characteristics with regard to can thickness and material are discussed.