A novel sliding mode control(NSMC) strategy combined with a fast terminal sliding mode observer(FTSMO) is suggested in this paper to solve the parameter variation issue of permanent magnet in-wheel motor(PMIWM) installed in the distributed drive electrical vehicle (DDEV). First, a novel sliding mode power converging law is employed to enhance the response speed of the PMIWM controller. Second, an FTSMO is suggested to compensate for the parameter variation of the PMIWM system to strengthen the robustness of the control object. Finally, a fuzzy controller is designed to adjust the control parameters of the NSMC to optimize the control performance. Several simulations and experiments demonstrate that the proposed FTSMO-NSMC scheme can precisely compensate for parameter variation of the control object and improve control accuracy effectively.