A variety of methods and arrangements for operating an internal combustion engine and one or more motor/generators in a hybrid vehicle are described. Generally, the engine is operated in a variable displacement or skip fire mode. Depending on the state of charge of an energy storage device and/or other factors, the engine is operated to generate more or less than a desired level of torque. The one or more motor/generators are used to add or subtract torque so that the motor/generator(s) and the engine collectively deliver the desired level of torque. In some embodiments, the engine may be run with a substantially open throttle to reduce pumping losses and improve fuel efficiency.