An electric drive unit having an electric motor, which has a rotor and a stator that includes a stator core and field windings, a housing assembly into which the electric motor is received, and a seal member. The stator core defines a plurality of stator cooling passages that extend longitudinally through the stator core. Each of the field windings has a protruding portion that extends from an axial end of the stator core. The protruding portions are encapsulated in a plastic material. The housing assembly has an annular wall member that defines a seal groove. The seal member is received in the seal groove and forms a seal between the annular wall member and the plastic encapsulation on the protruding portion of the field windings. A coolant is circulated through the stator cooling channels, and the seal member inhibits ingress of the coolant between the stator and the rotor.