An interior permanent magnet electric machine is described, and includes a stator including a plurality of electrical windings and a rotor disposed in a cylindrically-shaped void formed within the stator. The rotor includes a plurality of steel laminations assembled onto a shaft, wherein the shaft defines a longitudinal axis. Each of the steel laminations includes a plurality of poles and each of the poles includes a plurality of slots disposed near an outer periphery. The slots of the steel laminations are longitudinally aligned. A plurality of permanent magnets are disposed in a first subset of the slots, and plurality of packets assembled from anisotropic material are disposed in a second subset of the slots.