The design of the stator insulation system for a traction machine used in electric vehicles is a challenge due to the tight requirements set on compact size, high dynamic stresses and a lack of automotive specific insulation standards. A poorly designed stator insulation can lead to safety issues and stator faults. Approximately, 20-30% of faults in traction machines are stator faults. In order to safeguard a healthy operation of the traction machine, condition monitoring of the traction machine while the electric vehicle is running or at standstill can be applied. This paper summarizes the state of the art of stator insulation systems, presents various root causes leading to stator faults and classifies onboard condition monitoring techniques under a proposed characterization structure, distinguishing between self analysis and traction mode. This characterization aims at providing a broad perspective on stator fault monitoring techniques to automotive engineers and researchers, focusing on permanent magnet synchronous machines.