A hybrid rear axle provides a variety of functionality in addition to the functionality of a non-hybrid axle. The axle transmits power from an electric motor to the drive wheels at two selectable speed ratios to propel the vehicle. One of the two ratios is usable to propel the vehicle electrically with the engine stopped. With the drive wheels stationary, the axle transmits power from the driveshaft to the motor to charge a battery or from the motor to the driveshaft to start the engine.