A vehicle includes an engine, a motor, a belt, and a controller. The engine is configured to output torque via a crankshaft. The motor is configured to apply torque to and/or receive torque from the engine via an output shaft. The belt is operably disposed on the crankshaft of the engine and the output shaft of the motor. Rotation of the output shaft is transferred to the crankshaft via the belt. The controller is configured to identify a slip event by comparing a speed of the motor to a speed of the engine. The controller is further configured to count the number of slip events and diagnose a belt failure if the number of slip events exceeds a predetermined number of slip events over a predetermined number of drive cycles.