Modern transducers and actuators may have functional layers with multi-field coupling and some elastic layers. This paper considers a tubular bilayer system consisting of a thin dielectric tube coated with a thick elastic layer. We study the nonlinear electromechanical response and the linear axisymmetric vibration of the system subject to different applied voltages and inner/outer pressures within the framework of the general nonlinear theory of electro-elasticity, the related linear incremental theory, and by considering the continuity conditions at the interface. We investigate instability behaviour using the same basic formulae. The state-space method provides efficient and accurate free vibration analysis, considering the dynamic response at the lowest frequencies, so we can neglect the viscous and damping effects, which is well suited to this problem. New results indicate that the bilayer system improves its frequency capability and stability compared to the monolayer dielectric tube. The thick outer elastic layer stiffens the bilayer system against axisymmetric bifurcation, bulging and necking instabilities. It also performs better in front of axisymmetric instability, increasing the system’s capability to receive or produce higher voltages, especially for long waves.This work thoroughly explains bilayer functional systems’ behaviour when exposed to extreme environments such as high voltage or pressure.