A hybrid electric vehicle having a powertrain including an engine and an electric machine, and controllers configured to derate powertrain output torque below a nominal maximum to a fault-torque limit, in response to a vehicle fault or issue. The vehicle and controllers are also configured to transiently increase powertrain torque output above the fault-torque limit in response to a torque demand that exceeds the limit, and which is needed to enable a predicted vehicle maneuver. The controller also establishes a predicted duration for the predicted interim vehicle maneuver and for override of the fault-torque limit and delivery of the additional torque from the torque-demand signal and other signals. The predicted duration includes a time span to maneuver through roadway obstacles and traffic, but does not exceed a limited operation time or a limited power output established by the controller from the vehicle issue or fault identified by the fault signal.