Electric power steering (EPS) is an advanced steering system that uses an electric motor to provide steering assist. Being a new technology it lacks the extensive operational history of conventional steering systems. Also conventional systems cannot be used to command an output independent of the driver input. In contrast EPS, by means of an electric motor, could be used to do so. As a result EPS systems may have additional failure modes, which need to be studied.In this paper we will consider the requirements for successful EPS operation. The steps required to develop diagnostics based on the requirements are also discussed. The results of this paper have been implemented in various EPS-based programs.