This paper deals with the problem of observer design of the vehicle model which is represented by Takagi–Sugeno (T–S) fuzzy systems with the presence of uncertainties. A relaxed observer design is presented to estimate the unmeasurable states and the faults of the vehicle lateral dynamics model, simultaneously. The vehicle model is transformed into a system with unknown inputs. Then, it is rebuilt by adding the default to the system state equation. Based on the Lyapunov function approach and the introduction of some slack variables, sufficient conditions of unknown input observer design are formulated as Linear Matrix Inequalities (LMIs). Finally, the simulation section clearly shows the importance and effectiveness of the proposed strategy.