Vehicle dynamics play an important role in determining a vehicle’s stability. It is necessary to identify and obtain models related to vehicle dynamics to evaluate the performance of electric vehicles, as well as how to control them. This paper presents fundamentals of vehicle dynamics, proposing a three-degree-of-freedom nonlinear observer and controller to control lateral velocity and tire torque in comparison to a PID control, while also utilizing a Lyapunov function to determine the stability of the controlled state feedback system concerning the observer, which estimates state errors. This work demonstrates the mathematical development of estimations that will be fed into the algorithms of two active nonlinear controls (state feedback and PID), utilizing the results from Matlab-Simulink simulations of tire torque, lateral and angular velocities based on longitudinal velocity measurements, and employing dynamic gains, such as response to a steering maneuver by the driver following the international standards ISO 7401/2011 and ISO 3888-2. It is concluded that the observer is robust and exhibits energy-saving efficiency in tire torque, even under conditions of variable tire-ground friction.