In accordance with one embodiment of the present invention a two-wheel vehicle is provided. The vehicle includes a pair of wheel housings, each wheel housing having an inner circumference and an outer circumference, and further having an annular gear rack being positioned on the inner circumference and a wheel secured on the outer circumference. A motor mechanism drives a gear train that is meshed to the annular gear racks. A chassis is connected to a frame and interconnects the pair of wheel housings to the frame such that the frame moves independently from the pair of wheel housings. A tilting mechanism tilts the frame about the chassis such that the vehicle turns in the direction of the tilt. A stabilizing mechanism, when the frame is tilting, counteracts the forces on the vehicle to assist in maintaining an upright position while the vehicle is turning.