To improve the diagnostic detection speed in electric vehicles, a novel diagnostic algorithm of insulated gate bipolar transistor (IGBT) open circuit faults for power inverters is proposed in this paper. The average of the difference between the actual three-phase current and referential three-phase current values over one electrical period is used as the diagnostic variable. The normalization method based on the amplitude of the d-q axis referential current is applied to the diagnostic variables to improve the response speed of diagnosis, and to avoid the noise and the delay caused by signal acquisition. In the parameter discretization process, the variable parameter moving average method (VPMAM) is adopted to solve the variation of the average value over a period with the speed of the motor; hence, the diagnostic reliability of the system is improved. This algorithm is robust, independent of load variations, and has a high resistivity against false alarms. Since only the three-phase current of the motor is utilized for calculations in the time domain, a fast diagnostic detection speed can be achieved, which is significantly essential for real-time control in electric vehicles. The effectiveness of the proposed algorithm is verified by both simulation and experimental results.