Electric motors are very useful, clean and versatile and are composed of three major parts. Every eletric motor must have a current source, a magnet and a loop of coil. The motor transforms the potential energy of the power source into mechanical energy for rotating the coil. Electric current induces a magnetic field. The battery and the coil form a closed circuit when the leads are in contact with the holder slots, so there is electricity flowing through the coil creating a magnetic field. The magnetic field produced by the current in the coil interacts with the filed of permanent megnet, causing the coil to turn.
Source: OSU Experiments.