Implementation of multi-speed transmission for battery electric vehicle (BEV) is considered as one of effective methods in improving dynamic capability, reducing power consumption and downsizing the powertrain. Considering two trends of automotive technology, advanced driving assistance system (ADAS) and BEV electric powertrain, equipped with a two-speed transmission, can enhance the performance of automatic emergency braking systems (AEBS). When downshift operation is executed during regenerative braking, the multi-speed transmission in first gear can provide adequate brake force capacity for hard braking requirement, improving efficiency of energy recovery of drive motor as well as eliminating the dynamic lag of active braking booster. To ensure both the braking command and downshift requirement, a seamless clutch-to-clutch shifting control strategy based on power balance method is developed by analyzing the frictional work of two friction clutches inside the gear box and the transformation process of kinetic energy of rotational mechanical elements. To maintain the total energy balance of the powertrain as the control objective, the active power compensation of the drive motor during shifting fills the energy gap of the whole transmission system. With the estimation of clutches’ friction torque and shifting stage analyzer, optimal drive motor torque command can be numerically solved and a complete shifting control flow is designed in this study. Simulation results demonstrate the effectiveness of proposed control method in achieving seamless downshifting during regenerative braking, enhancing AEBS performance and improving energy recovery efficiency.