A novel squirrel cage eddy current coupling with adjustable radial air gap was presented, which can change the output speed by changing the air gap thickness in radial direction between the copper strips and the permanent magnet. It has the advantages of no axial force in speed regulation and less eccentric force in axisymmetric structure. The 2-D electromagnetic torque model of the rotor was established, and the influence of the air gap thickness on the electromagnetic torque was also studied by finite element method. Further, a novel method to solve the dynamic equation of the eddy current coupling was proposed based on the effect of air gap thickness and relative speed on torque characteristics, and was applied to the speed regulation performance analysis. In addition, the influence of the relative magnetic permeability of the permanent magnet back yoke and the internal rotor on the speed regulation performance was studied.