<p>An induction motor (IM) drive system with low-resolution encoders has to make a compromise between cost and performance, which is suitable for industrial electric vehicles, including electric forklifts, and electric lifts. However, the inaccurate and delayed position signals from low-resolution encoders lead to torque ripple and oscillations in rotational speed, especially in the low-speed range. To address these problems, this paper proposes an improved low-resolution encoder-based speed and rotor flux estimation strategy. The hybrid speed observer is designed to estimate the rotational speed smoothly and accurately. Meanwhile, an improved reduced-order flux observer with an adaptive gain is designed to meet the control performance requirement in the wide-speed range. The improved low-resolution encoder-based speed and rotor flux estimation strategy can meet the requirements of a high output torque at extremely low or zero speed, and full-power operation in the high-speed range. A 680 W IM test platform is built, and experimental results verify the effectiveness and correctness of the improved low-resolution encoder-based speed and rotor flux estimation strategy. </p>