This paper introduces a novel method for the enhancement of automated vehicle safety and efficiency during critical manoeuvres. The fundamental of the presented method is the observer design architecture, in which lateral dynamic states of the vehicle are evaluated. The novel observer consists of both model-based and machine-learning-based methods to ensure the selected design performances, such as efficient trajectory tracking and safety evaluation of the autonomous vehicle. In contrast to the already introduced and applied stability index-based methods, the proposed safety evaluation process is able detect stability loss and performance degradation of the autonomous vehicle. In the proposed observer-based safety evaluation method, stability and performance loss detection is based on the comparison of model-based and learning-based state observation. The main novelty of the paper is the design of the reinforcement learning (RL) based observer in a guaranteed structure that results in small observation error even under nonlinear vehicle dynamics. Furthermore, a lateral safety index is defined based on the value of the improvement vector representing the addition to the model-based estimation. By this means, with the proposed safety evaluation method both safety and performance loss hazards can be identified simultaneously.