In this Book, a new measured based friction model is developed to describe the vehicle lateral dynamics which are modeled by a so called two-track vehicle model. The effects of load transfer and the effects caused by slip angles in relation to the track width of the vehicle can be included in this model. On the other hand, the two- track vehicle model incorporates a more sophisticated tire model in order to accurately represent the tire forces and study the vehicle behavior in the nonlinear region. Simulation and experimental results show that, within a considerable range of slip angle, there is a good agreement between the simplified two-track vehicle model and the simulated test data from CarSim. A nonlinear observer for estimation of lateral velocity and yaw rate of automotive vehicles is proposed. This observer is based on yaw rate measurement in addition to steering angle, longitudinal velocity and longitudinal forces measurements. Stability of the proposed observer is investigated with Lyapunov direct method. Simulation results are presented to validate the nonlinear observer, the friction model and to explore automobile behavior in different scenarios.