The power-on upshift control in automatic transmissions has a significant effect on the shift quality and is very complex. This paper aims to investigate the relationship between the limited motor torque control and the performance of the power-on upshift control in electric vehicles. First, a simplified model for an electric vehicle powertrain with a general two-speed automatic transmission was built. Then, a power-on upshift control strategy was introduced into the powertrain model, with the aim of a constant output torque during power-on upshifts. The control strategy fully utilized the control flexibility of electric motors and specifically focused on the effects of the limited motor torque control during power-on upshifts. Simulation results demonstrated that the proposed control strategy could significantly improve the shift quality of electric vehicles under mild driving conditions. However, the performance of the proposed control strategy under aggressive driving conditions was impaired by the limited motor torque control. An effective solution was proposed to improve the performance of the power-on upshift control under aggressive driving conditions. This work may be helpful to improve the shift quality of both electric vehicles and internal-combustion engine vehicles with automatic transmissions.