An electromagnetically variable transmission includes an outer rotor and an inner rotor. The inner rotor is independently rotatable within a center aperture of the outer rotor. The outer rotor is independently rotatable about the inner rotor. One of the rotors has a plurality of permanent magnets configured in pairs and facing an air gap disposed between the outer rotor and the inner rotor. The other rotor has a plurality of slots spaced about a magnetically permeable core having embedded windings. The outer inner rotors are simultaneously rotatable in one direction. In response to rotation of the outer rotor portion and the inner rotor portion, a magnetic flux path is generated between the permanent magnet pairs, the air gap, the outer rotor core and the inner rotor portion core, to induce electrical power in the windings, which transfers power between the inner rotor portion and the outer rotor portion.