Torque ripple is a major problem for permanent-magnet (PM) machines. It is examined by focusing on the magnetic circuit of the PM machine. Because there is a relationship between the torque ripple and the magnetic energy that is stored in the magnetic field along the air gap of the PM machine, a variation in the magnetic energy was revealed initially. A new magnet geometry is obtained by forming ledges and notches in the permanent magnets to modify the variation of the magnetic energy and the fluctuation in torque. Thus, a new PM design is proposed in this study to minimize the torque ripple of an outer-rotor surface-mounted PM machine. An improvement of 44.69 in the torque ripple is achieved thanks to the new magnet design. In addition, improvements are made in the average torque and the total harmonic distortion of the back electromotive force.