This article investigates the differential steering-based schema to control the lateral and rollover motions of the in-wheel motor-driven electric vehicles. Generated from the different torque of the front two wheels, the differential steering control schema will be activated to function the driver’s request when the regular steering system is in failure, thus avoiding dangerous consequences for in-wheel motor electric vehicles. On the contrary, when the vehicle is approaching rollover, the torque difference between the front two wheels will be decreased rapidly, resulting in failure of differential steering. Then, the vehicle rollover characteristic is also considered in the control system to enhance the efficiency of the differential steering. In addition, to handle the low cost measurement problem of the reference of front wheel steering angle and the lateral velocity, an [Formula: see text] observer-based control schema is presented to regulate the vehicle stability and handling performance, simultaneously. Finally, the simulation is performed based on the CarSim–Simulink platform, and the results validate the effectiveness of the proposed control schema.