In safety-critical applications, five-phase fault-tolerant permanent machines are attracting more and more attentions. In this paper, the synthesis of magnetomotive force (MMF) produced by the windings in five-phase machine is analyzed firstly. A method to eliminate the mutual-inductance in fault-tolerant machines is proposed and an approach of the pole-slot combination selection of the five-phase fault-tolerant machine with low-mutual inductance is given. Then a five-phase fault-tolerant in-wheel permanent machine is designed according to the requirements of the electric vehicle application. The basic dimensions of the machine are derived from the analytic machine design method. Finally, the finite-element model of the designed machine is built, and a method of machine parameter optimization is proposed with the help of the finite-element model. The waveform of the no-load back EMF, output torque and the fault-tolerant capacity have been taken into account in the optimization, which improves the performance of the machine.