A system and method for heating ferrite permanent magnets in an electrical machine is disclosed. The permanent magnet machine (10) includes a stator assembly (12) and a rotor assembly (14), with a plurality of ferrite permanent magnets (32) disposed within the stator assembly or the rotor assembly to generate a magnetic field that interacts with a stator magnetic field to produce a torque. A controller (22) of the electrical machine is programmed to cause a primary field current to be applied to the stator windings to generate the stator magnetic field, so as to cause the rotor assembly to rotate relative to the stator assembly. The controller (22) is further programmed to cause a secondary current to be applied to the stator windings to selectively generate a secondary magnetic field, the secondary magnetic field inducing eddy currents in at least one of the stator assembly and the rotor assembly to heat the ferrite permanent magnets.