Flux-switching permanent magnet (FSPM) motors have gained increasing attention in the electric vehicles (EVs) applications due to the advantages of high power density, high efficiency. However, the heat sources of both permanent magnet (PM) and armature winding are located on the limited stator space in the FSPM motors, which may result in the PM overheated and irreversible demagnetization caused by temperature rise and it is often ignored in the conventional thermal analysis. In this paper, a new electrical-thermal two-way coupling design method is proposed to analyze the electromagnetic performances, where the change of PM material characteristics under different temperatures is taken into consideration. Firstly, the motor topology and design equations are introduced. Secondly, the demagnetization curves of PM materials under different temperatures are modeled due to PM materials are sensitive to the temperature. And based on the electrical-thermal two-way coupling method, the motor performances are evaluated in details, such as the load PM flux linkage and output torque. Then, the motor is optimized, and the electromagnetic performances between initial and improved motors are compared. Finally, a prototype motor is manufactured, and the results are validated by experimental measurements.