Electric motor is an integral part of electric propulsion system in electrified vehicles. Choice of an appropriate electric motor and its speed and torque control strategy play an utmost significant step so as to get the required operational characteristics from the electric drive train. The aim of thsi paper is to review on different kinds of traction motors for electric vehicles (EVs) and hybrid electric vehicles (HEVs) and high transient performance speed sensorless control for traction drive. The heart of electric propulsion system, electric motor types for required operational characteristics and limitations are summarized from a system perspective with the latest improvements. For high performance applications such as EVs / HEVs, a brief review on speed sensorless control is presented. Different machine mathematical model based rotor speed estimation schemes for sensorless control are reviewed with respect to key features and operational limitations. Finally, this paper provides further research directions in the field of traction motor drive and its speed sensorless control.