The in-wheel electric vehicle with distributed drive units has better stability and flexibility than traditional centralized drives, but may encounter a higher failure rate due to additional actuators and sensors, especially that the faults of the wheel-side position sensor make motor torque out of control. To overcome this problem, a fault-tolerant control strategy with a multi-states switching method is proposed. The strategy judges the sensor failure by verifying redundant speed information, realizes sensorless control schemes by flux-observer based algorithm in high-speed range and I-F control algorithm in low-speed range with low acoustic noise, and applies adaptive transition process between different control schemes. To pursuit high stability, the signal-to-noise analysis for fault judgment due to sensorless estimation accuracy is discussed. Meanwhile, the principle of I-F resonant oscillations during the transition process is initially deduced in detail, and the conclusion of stability condition is obtained. Finally, the influence of system parameters on resonance performance is analyzed by simulation, and the effectiveness and reliability of the proposed strategy for the risk-controlling process are verified by experiments.