A vehicle includes an engine, a traction motor, and a torque converter that is driven by the traction motor. A clutch arrangement mechanically couples an output of the torque converter to transmission gearing. A controller is provided in the vehicle that is configured to command an increase in slip, or decrease in clutch pressure, in the clutch arrangement in response to an increase in speed of the traction motor. The commanding of an increase in slip enables a product of the torque ratio of the torque converter and an input torque to the torque converter to remain generally constant during the increase in speed of the traction motor.