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The General Motors (GM) 1ET35 drive unit is designed for an optimum combination of efficiency, performance, reliability, and cost as part of the propulsion system for the 2014 Chevrolet Spark Electric Vehicle (EV) [1]. The 1ET35 drive unit is a coaxial transaxle arrangement which includes a permanent-magnet (PM) electric motor and a low loss single-planetary transmission and is the sole source of propulsion for the battery-only electric vehicle (BEV) Spark. The 1ET35 is designed with experience gained from the first modern production BEV, the 1996 GM EV1. This paper describes the design optimization and development of the 1ET35 and its electric motor that will be made in the United States by GM. The high torque density electric motor design is based on high-energy permanent magnets that were originally developed by GM in connection with the EV1 and GM bar-wound stator technology introduced in the 2Mode Hybrid electric transmission, used in the Chevrolet Volt and in GM eAssist systems.