A vehicle axle assembly including an electric motor, an electric power source, a mode shift gearset, an actuator and a differential within a housing. The motor can include a first output member. The mode shift gearset can include a second output member and a shift member. The shift member can transmit torque between the first and second output members when the shift member is in a second position. The actuator can be coupled to the shift member to move the shift member between first and second positions. The differential can include a differential case and a differential gearset. The differential case can be drivingly coupled to the second output member to receive rotary power therefrom. The differential gearset can transmit rotary power between the differential case and first and second output shafts.