A Flywheel is a rotating mechanical device that evens out the energy fluctuations of an engine and establishes an even crank rotational speed by storing kinetic energy. This paper aims to study the effect of the potential failures on flywheel due to balancing hole position for a proposed grey cast iron material. Any change in its design requires a thorough comprehension of the expected failure modes during operation. For a flywheel, typical failure like crack is very critical for vehicle and occupant safety. Here, CAE test method is adopted for simulating the actual bench tests for design validation of the flywheel. This simulation helps to understand the stresses caused by the structural and thermal loads and recommend design solution which can be readily adopted. The simulation is followed by a rig test where the validation tests are performed for different balancing hole depths. The study revealed that 1. Balancing hole have immense role in crack initiation 2. Stress continuity is important in addition to stress values 3.Flywheel spinning reduces the thermal stresses during transmission clutch slippage.