With the electromagnetic theory as basis, we present a sensor model for three-axis magnetometers suitable for localization and tracking applications. The model depends on a physical magnetic dipole model of the target and its relative position to the sensor. Furthermore, the dependency between the magnetic dipole and the target orientation has been modeled enabling tracking of a maneuvering target. Due to multimodality, a bank of Extended Kalman Filters is proposed for tracking road vehicles. Results from field test data indicate excellent tracking of target position.