The automobile permanent magnet stepless retarder is beneficial to achieving for the best slow braking under various road conditions. In this paper, the working principle of permanent magnet retarder is studied and an axial moving type stepless speed regulation design scheme is proposed. The design parameters are determined by theoretical analysis and calculation, and the second-order nonlinear structure optimization is performed by using the fmicon function module in Matlab to obtain the optimal solution of the key structure. A three-dimensional electromagnetic-field finite-element simulation model is established by ANSOFT software. The static and transient analyses of the magnetic field and the braking torque are performed to investigate the distribution characteristics and influencing factors of the magnetic field and the braking torques at different axial positions between the rotor and the stator. The results show that the retarder can achieve good linear control and stable braking torque output, which can meet the needs of the stepless retarding braking.