The problem of improving the reliability and creation of fault tolerant systems is one of the most important in modern technology and engineering. Actually, the complexity of technical systems is increasing, thus the requirements to reliability indices is constantly increasing. Especially the correct assessment as in the design stage as well as in operating conditions is important in order to improve reliability. Modern trends in the electrification of various types of vehicles set up similar tasks for developers and engineers of electric propulsion systems. Considering that the electric propulsion systems are safety critical, very strict requirements are imposed on reliability and fault tolerance to each of their component units, such as traction motor, power electronics, electric power source, and control unit. This paper presents a systematic method of estimation the fault tolerance of a multi-phase permanent magnet synchronous motors based on a multi-level Markov model of the lifecycles for the multi-state system. The impact on the fault tolerance degree regarding the number of phases of permanent magnet synchronous motors is investigated. The practical application of the proposed technique for the multi-phase traction motor and results are presented. Finally, the results of the study allowing fault tolerance assessment and the choice of the most appropriate traction electric motor design considering reliability and fault tolerance are discussed.