A transmission for use in a motor vehicle having an engine and a driveline is provided. The transmission includes an input shaft driven by the engine, an output shaft adapted for connection to the driveline, a mainshaft, a first planetary gearset, a motor/generator and a second planetary gearset. The first planetary gearset includes a first input member driven by the input shaft, a first output member driving the mainshaft and a first reaction member. The second planetary gearset includes a second input member, a second output member fixed to the output shaft and a ring gear operable to drive or be driven by the motor/generator. A rotor of the motor/generator circumscribes and is fixed to the ring gear.