A stator assembly for an electric machine includes stator teeth connected to a stator yoke to form a stator core. Adjacent teeth define a stator slot. Stator windings are disposed within the slot. A molding material fills the slot around the windings, providing a desired thermoelectrical performance level at different slot regions, including electrical insulation, thermal conductivity, and/or electrostatic shielding levels. A method insulates the stator assembly by inserting a molding tool(s) into the slot to define a void volume, filling the void volume with the dielectric molding material, and curing the dielectric molding material to form a slot liner layer adjacent to the tooth walls. A slot opening between adjacent teeth is filled with an electrically-conductive resin to form an electrostatic shielding layer. An electrical system includes an AC voltage bus connected to a power inverter module and to the electric machine having the above-described stator assembly.