Abstract In this paper, a new controller is proposed for lateral stabilization of four wheel independent drive electric vehicles without mechanical differential. The proposed controller has three levels including high, medium and low control levels. Desired vehicle dynamics such as reference longitudinal speed and reference yaw rate are determined by higher level of controller. Moreover, using a neural network observer and a fuzzy logic controller, a novel reference longitudinal speed generator system is presented. This system guarantees the vehicle’s stable motion on the slippery roads. In this paper, a new sliding mode controller is proposed and its stability is proved by Lyapunov stability theorem. This sliding mode control structure is faster, more accurate, more robust, and with smaller chattering than classic sliding mode controller. Based on the proposed sliding mode controller, the medium control level is designed to determine the desired traction force and yaw moment. Therefore, suitable wheel forces are calculated. Finally, the effectiveness of the introduced controller is investigated through conducted simulations in CARSIM and MATLAB software environments.