Abstract: A method and system for dynamic testing of loaded or unloaded electrical rotating electric motors, wherein a dynamic speed-time characteristic of the electric motor is determined during acceleration of the motor from standstill to steady-state speed or after the motor has reached steady-state speed, depending on the performance characteristic to be derived, and analyzed to derive a performance characteristic of the electric motor. Accurate measurement of the motor speed may be achieved by attaching to the shaft a digital rotary encoder which generates successive HIGH and LOW logic levels during respective successive time intervals. The shaft is rotated and the respective periods of each successive logic level are accumulated so as to allow derivation of the angular rotation or a function thereof of the shaft. Dynamic performance may be determined accurately as well as steady-state performance without slowing the electric motor's speed of rotation by use of a flywheel.