An FE-based physical phase variable model is proposed for PM machines under stator short-circuit faults. The parameters of the proposed model, inductances and back EMFs are determined using the FE-circuit coupled computation of the machine under the same type of fault. The parameters obtained include information on the fault location and the number of turns involved, in addition to the space harmonics and the effects of stator saturation. The FE-based phase variable model that has been developed is verified through comparison with the FE model. The significance of the work is that it introduces a feasible procedure to build a physically accurate and computationally fast phase variable model for PM machines under stator short-circuit fault conditions. Such a model is useful for the study of fault diagnosis and prognosis.