In this paper, a hybrid thermal model is developed for thermal analysis of a hairpin winding permanent magnet machine. The proposed model combines two dimensional finite element model with lumped parameter network model, which possesses the advantages of both accuracy and computational effectiveness. Compared with three dimensional transient field finite element analysis, the proposed model possesses fast calculation speed. On the other hand, compared with traditional lumped parameter network model, the proposed model gives more insight results of permanent magnet machine. In addition, iterative coupled electromagnetic and thermal analysis is also investigated to realize multi-physics analysis of permanent magnet machine. In order to validate the effectiveness of the proposed model, simulation results comparison between commercial software and the proposed model is carried out, and good agreement is achieved.