The gears, where the power and torque transmissions are performed with no contact and with help of the magnetic forces, are called magnetic gears. With this gears, unlike the mechanical gear transmissions, there are no noise, vibrations and friction, so therefore, there is no need for lubrication and maintenance costs are considerably lower. Two basic types of magnetic gears are: converted and magnetic gears with variable magnetic field. Magnetic gears are made of iron, boron and neodymium alloy, which allows to obtain a permanent magnet for maximum power magnetisation. This paper shows the outline of the magnetic gear development, their classification and characteristics, where the gear ratio and torque density are the most important. Also, the examples of application of magnetic gears in automotive and transportation industry are given in the paper.