Permanent magnet Brushless DC (BLDC) motors have been attracted by electric vehicle (EV) manufacturers in the last decade. The paper presents a simple fault diagnosis technique to detect switch faults of three phases Voltage Source Inverter (VSI) drive of BLDC motor in a closed-loop control scheme. The proposed fault diagnosis system is capable to detect the fault occurrence, identify fault type and the faulty switch of inverter based on Discrete Fourier Transform (DFT) analysis of the measured line voltages of BLDC motor. BLDC motor drive and the proposed fault diagnosis system are simulated. Simulation results were validated first by experimental data for BLDC motor operation under healthy condition. A knowledge based table is developed to identify switch faults of VSI by analyzing the simulation results under various fault conditions. The proposed fault diagnosis algorithm does not need massive computational effort and can be implemented as a subroutine with a closed-loop control algorithm of the BLDC motor on a single chip microcontroller. The obtained results show correct detection and identification of inverter switch faults in BLDC motor.