An electric machine that is configured to propel a vehicle includes a stator and a rotor. The stator has windings that are configured to generate magnetic fields. The rotor has a plurality of magnetic blocks that interacts with the magnetic fields to produce rotational motion. Each of the plurality of magnetic blocks is segmented into a plurality of permanent magnets. Adjacent permanent magnets within each magnetic block are separated from and secured to each other via an intermediate electrically insulating material. The intermediate electrically insulating material is comprised of magnetic particles that are suspended in an adhesive matrix.