Why don't cars do the same as many trains and have diesel engines supply power for electric traction motors. As full torque is available with these electric motors there wouldn't be any need to change gear.
The thing is it's heavier, less efficient, more expensive and more complicated (and therefore more likely to do wrong) than mechanical transmission. It's only now with lighter weight motors and better batteries that diesel or petrol electric hybrids have become viable and can beat straight mechanical transmission on efficiency, but they are still heavier, more expensive and more complicated. Diesel Electric only became standard on trains because it can take much higher power and torque than mechanical. Then again for lighter and less powerful rail vehicles, mechanical has always had the upper hand, such as on the first generation DMUs and now the 172s.
Some early buses were Petrol Electric, but it didn't last long at all.
I think most hybrid cars have gears anyway, even automatics. A lot of hybrid buses do too, although some have the motor directly driving the wheels. Thing is, some hybrids the engine is still directly driving the wheels through a gearbox, then the motor is connected via a clutch so it can either power with the engine and boost power, be driven by the wheels for regenerative braking, or be driven by the engine for battery charging.