Petroleum based fuel consumption and greenhouse gas emissions have been reduced using hybrid applications in the automotive sector in the last decades. Parallel hybrid construction, which is equipped with internal combustion engine and electric motor, for the propulsion of vehicle is one of the most preferred alternatives for hybridization. The purpose of this study is to investigate the changes in the fuel consumption and exhaust emissions in the powertrain components for a parallel hybrid with torque coupling unit for different values of gear ratios. Investigation of the effects of gear ratios on the torque coupling unit, gearbox unit, and differential is performed by simulating the parallel hybrid powertrain in the MATLAB® and Simulink® environment. New European Drive Cycle speed and acceleration requirements are defined as the input parameters for this simulation. The fuel consumption, exhaust emission, and state of charge of the battery are determined according to the power requirement of internal combustion engine and electric motor. Five different gear ratio combinations are simulated. These combinations are arranged by using alternative ratios in the third stage of gearbox unit, torque coupling unit, and differential. The best gear ratio distribution among these combinations are determined for reducing the fuel consumption and the carbon dioxide (CO2), carbon monoxide (CO), nitrogen oxides (NOx), and hydrocarbon (HC) emissions. It is found that an improvement of 17% in the fuel consumption and reductions of 9.1% in the CO2, 18% in the CO, 4% in the HC, and 8% in the NOx emissions can be achieved by the proper arrangements of gear ratios in the powertrain components.