An axle assembly comprising: an electric motor having a rotor that is rotatable about an axis ; a drive pinion that extends through the rotor and is rotatable about the axis ; a gear reduction unit that includes: a first gear set that has a first sun gear that is operatively connected to the rotor and is rotatable about the axis , a first planetary ring gear that is fixedly positioned such that the first planetary ring gear is not rotatable about the axis , a first set of planet gears that meshes with the first sun gear and the first planetary ring gear , and a first planet gear carrier that rotatably supports the first set of planet gears ; and a second gear set that has a second sun gear that is rotatable about the axis , a second set of planet gears that meshes with the second sun gear and that is rotatably supported on the first planet gear carrier , wherein members of the second set of planet gears have a smaller diameter than members of the first set of planet gears ; and a shift collar that is rotatable about the axis with the drive pinion and that is moveable along the axis between a first position in which the shift collar couples the first planet gear carrier but not the first sun gear or the second sun gear to the drive pinion and a second position in which the shift collar couples the second sun gear but not the first sun gear or the first planet gear carrier to the drive pinion . an electric motor having a rotor that is rotatable about an axis ; a drive pinion that extends through the rotor and is rotatable about the axis ; a gear reduction unit that includes: a first gear set that has a first sun gear that is operatively connected to the rotor and is rotatable about the axis , a first planetary ring gear that is fixedly positioned such that the first planetary ring gear is not rotatable about the axis , a first set of planet gears that meshes with the first sun gear and the first planetary ring gear , and a first planet gear carrier that rotatably supports the first set of planet gears ; and a second gear set that has a second sun gear that is rotatable about the axis , a second set of planet gears that meshes with the second sun gear and that is rotatably supported on the first planet gear carrier , wherein members of the second set of planet gears have a smaller diameter than members of the first set of planet gears ; and a first gear set that has a first sun gear that is operatively connected to the rotor and is rotatable about the axis , a first planetary ring gear that is fixedly positioned such that the first planetary ring gear is not rotatable about the axis , a first set of planet gears that meshes with the first sun gear and the first planetary ring gear , and a first planet gear carrier that rotatably supports the first set of planet gears ; and a second gear set that has a second sun gear that is rotatable about the axis , a second set of planet gears that meshes with the second sun gear and that is rotatably supported on the first planet gear carrier , wherein members of the second set of planet gears have a smaller diameter than members of the first set of planet gears ; and a shift collar that is rotatable about the axis with the drive pinion and that is moveable along the axis between a first position in which the shift collar couples the first planet gear carrier but not the first sun gear or the second sun gear to the drive pinion and a second position in which the shift collar couples the second sun gear but not the first sun gear or the first planet gear carrier to the drive pinion . <EOS>