A vehicle includes a motor between an engine and transmission and a controller configured to control motor and engine torque during an upshift to generate a reserve torque during a preparatory phase applied to the transmission during a torque phase. The controller increases engine torque for the reserve torque, and decreases motor torque such that combined engine and motor torque satisfy driver demanded torque without retarding spark when available motor torque is insufficient to provide the reserve torque. A method for controlling a vehicle having a motor connected between an engine and a transmission includes increasing engine torque for reserve torque to be applied during a torque phase of an upshift responsive to available motor torque being insufficient to satisfy the reserve torque, and reducing engine torque by retarding spark only if combined engine torque and motor torque exceeds driver demand torque after reducing motor torque to a minimum threshold.