The company also engaged in limited freight handling primarily as an interchange with Spreckels' San Diego and Arizona Railway (SD&A) from 1923 to 1929.

Declining ridership, due in large part to the growing usage of the automobile, ultimately led the company to discontinue all streetcar service in favor of bus routes in 1949.

Some see this as related to National City Lines' General Motors streetcar conspiracy controversy, as the SDERy's president had been with NCL previously.

The following year on November 9, the first electric-powered streetcar made a test run on new tracks up Broadway to Kettner Boulevard and on to "Old Town".

On January 30, the SDERy purchased the SDSCC and the majority of its assets for $115,000 ($3.9 million in 2023 adjusted for inflation); over the next few years the company would also acquire the competing Park Belt Line and the Ocean Beach Railroad.

Plans were made to convert all existing lines to traction, and ten single-truck, single-trolley, open platform wooden cars were subsequently purchased from the J. G. Brill Company.

1, the first such electrically operated car in the United States, made the inaugural run on September 21, 1892, with many of the city's notables aboard.

In August 1895, the Citizens Traction Company (CTC) was formed and purchased the remains of the SDCR for $17,600, adapting the line to electric operation in order to compete with the SDERy.

In 1905 Spreckels had a new power generating plant built to accommodate the additional loads imposed by the expanding streetcar network.

Spreckels forced a ballot initiative in 1910 to amend his charter with the City of San Diego to give him more than 25 years on his leases to operate streetcar service.

The following year, construction of a new brick car barn located at Adams Avenue and Florida Street was completed.

On November 15, 1919, the "golden spike" was driven and construction of the SD&A was ceremonially completed at a cost of $18 million (three times the original estimate).

Spreckels announced plans in 1920 to discontinue service on several rail lines to offset expenses, leading to approval of "zone fares".

The population of the city increased due to an influx of military personnel and defense-related industries, and ridership on public transit rose 600 percent during the war years.

Used transit vehicles were purchased from around the nation, and more electrical substations were built (one in the basement of the Spreckels Theatre Building on Broadway).

Sponsored by the Pacific Railroad Society of Los Angeles, a "farewell to the streetcars" excursion was held, operated over the remaining trackage.

The following month 45 new GM buses (each costing $20,000)[citation needed] paraded down Broadway to mark the retirement of the street cars;[14] free rides were offered during the procession.

446 pulled into the Adams Avenue car barn,[14] making San Diego the first major southwestern city to eliminate streetcars and convert to an all-bus transit system.

In May 1949 work crews began removing the overhead trolley lines and tracks on the loop at Santa Fe Depot.

After years of planning and development, the "San Diego Trolley" (a new interurban light rail mass transit system) made its inaugural run on July 19, 1981, on the 15.9-mile (25.6 km) long "South Line" between downtown and the Mexican border.

[17] The PCC cars were planned to run on a loop route around downtown using existing San Diego Trolley tracks.

By March 2011 MTS began work on a study to evaluate the feasibility of reconnecting Balboa Park, the San Diego Zoo, and downtown San Diego through a fixed-guideway, electrified streetcar line[18] that might operate as an extension of the Silver Line and might be operated with other restored heritage streetcars.