An axle assembly comprising: an axle housing ; a differential carrier that is mounted to the axle housing and rotatably supports a differential ; a differential carrier cover that is mounted to an end of the differential carrier that is disposed opposite the axle housing ; an electric motor module disposed in the differential carrier between the axle housing and the differential carrier cover ; a gear reduction module that is disposed adjacent to the differential carrier cover , wherein the gear reduction module transmits torque from the electric motor module to the differential via a drive pinion and the gear reduction module includes: a sun gear that is operatively connected to the electric motor module and rotatable about an axis ; a planetary ring gear that is disposed on the differential carrier cover ; a planet gear that meshes with the sun gear and the planetary ring gear ; and a planet gear carrier that rotatably supports the planet gear ; and a shift mechanism that is moveable to selectively engage a low range gear ratio and a high range gear ratio of the gear reduction module , characterised in that the shift mechanism has a shift collar that transmits torque from the gear reduction module to the drive pinion , wherein the shift collar is received inside the sun gear and is movable between a first position in which the low range gear ratio is engaged, a second position in which a neutral gear ratio is selected, and a third position in which the high range gear ratio is engaged. an axle housing ; a differential carrier that is mounted to the axle housing and rotatably supports a differential ; a differential carrier cover that is mounted to an end of the differential carrier that is disposed opposite the axle housing ; an electric motor module disposed in the differential carrier between the axle housing and the differential carrier cover ; a gear reduction module that is disposed adjacent to the differential carrier cover , wherein the gear reduction module transmits torque from the electric motor module to the differential via a drive pinion and the gear reduction module includes: a sun gear that is operatively connected to the electric motor module and rotatable about an axis ; a planetary ring gear that is disposed on the differential carrier cover ; a planet gear that meshes with the sun gear and the planetary ring gear ; and a planet gear carrier that rotatably supports the planet gear ; and a shift mechanism that is moveable to selectively engage a low range gear ratio and a high range gear ratio of the gear reduction module , characterised in that the shift mechanism has a shift collar that transmits torque from the gear reduction module to the drive pinion , wherein the shift collar is received inside the sun gear and is movable between a first position in which the low range gear ratio is engaged, a second position in which a neutral gear ratio is selected, and a third position in which the high range gear ratio is engaged. a sun gear that is operatively connected to the electric motor module and rotatable about an axis ; a planetary ring gear that is disposed on the differential carrier cover ; a planet gear that meshes with the sun gear and the planetary ring gear ; and a planet gear carrier that rotatably supports the planet gear ; and a shift mechanism that is moveable to selectively engage a low range gear ratio and a high range gear ratio of the gear reduction module , characterised in that the shift mechanism has a shift collar that transmits torque from the gear reduction module to the drive pinion , wherein the shift collar is received inside the sun gear and is movable between a first position in which the low range gear ratio is engaged, a second position in which a neutral gear ratio is selected, and a third position in which the high range gear ratio is engaged. <EOS>