By electrifying the tram network MTAG needed a large number of electric railcars. In the years 1898 and 1899 initially 100 vehicles of the class A 1.1 were built; in the years between 1899 and 1902 a second series (A 2.2), which included another 150 cars, was following up. 

The manufacturer was the Munich wagon factory Josef Rathgeber; the maximum bogies were supplied by the Bergische Stahlindustrie. Not only the maximum bogies, but also the glazed platforms and the air brakes were extremely modern and revolutionary at the time. The cars were assigned the numbers 51-300; whereas from 1908 the car numbers 51-100 were changed again into 301-350. In the 1920s, the cars were modernized to varying degrees - especially the conversion of six small to three large side windows being the most prominent - and referred to as Type A 3.1 and A 4.2.

A planned matching trailer car never went into production for cost reasons; former horse railway cars, which were rebuilt to trailer cars for the electric tram, were called "type a". 

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(A note to the special naming of Munich tram cars: motorized cars are generally being labelled with capital letters, whereas unmotorized trailer cars have small letters.)

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After the death of Engineer Hippe, the former factory engineer Ferdinand Dix followed in 1902 as director of MTAG. Dix proved quite successful, so that with the dissolution of the company in 1907 he continued presiding as head of transportations on behalf of the city until 1916, when city inspector Otto Schauberger was assigned to second him (Schauberger had previously been a civil servant in the municipal tram inspection).

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The development of the line network was not just adapted to current needs, but followed a guideline plan for future route development, which also considered other aspects of urban development. A precursory plan, designed in 1899, provided 16 main lines and five shuttle lines.

This route plan was further developed in 1905 into the first general route plan: in addition to a conversion of the sometimes heavily overloaded system, the new construction of routes in stages were part of it. In total, 25 lines were planned.

At the heart of this plan were three ring lines. The inner ring had existed for several years as Line II (Nordring/Northern ring) and was reinforced in 1906 by the Südring (Southern ring) Line 12.

A large ring with a route from Nikolaiplatz over Rotkreuzplatz - Ganghoferstraße - Harras - Brudermühlstraße - Giesinger Berg - St. Martin Straße- Balanstraße - Orleansstraße - Possartstraße - Tivolistraße - English Garden and back to Nikolaiplatz was planned. In the following years only parts of it were realized, it did not come into existence until today.

The planned outer ring, which was intended as a connection between the outlying districts, was to be built as an electric high-speed railway line with its own railway body. Another goal of this plan, which was largely realized in the following years, was the relief of the narrow inner-city streets and the realization of a north-south connection through the Old Town. In 1906, the square in front of Central Station and Karlsplatz (Karl Square) were reconstructed with a lot of switches, so that a more flexible traffic management and a short-term adjustment to the upcoming demands were possible.

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In October 1906, the lines were assigned numbers instead of the former color plates; with the winter timetable 1906, the entire route network was restructured, remaining as such until about 1935. The line network was divided into trunk lines (1-10) with the associated reinforcement and replacement lines (11-20).

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On January 1,1907 the above-average acceleration and the associated implementation of the general route plan resulted in the takeover of MTAG by the city as "Städtische Straßenbahnen München" (Municipal Tramway Munich).

Within the next few years the commissioning of the East-West Line 19 (Westend - Steinhausen) and the construction of the Inner City - North-South crossing through Theatinerstraße - Weinstraße - Marienplatz - Sendlinger Straße came into being.

Not only the new settlement areas, but also newly added infrastructural facilities with large public traffic had to be included in the tram network at very short notice: there were the new hospitals (f.ex. the Schwabing Hospital), the newly built Großmarkthalle (Wholesale Market Hall), the barracks in Leonrodstraße, the ever extending cemeteries, the zoo and the new exhibition grounds. For the latter special exhibition lines were introduced, which transported the flow of visitors to the exhibition halls only temporarily at a time. 

Altogether, the feeder line to the Prinzregententheater (established in 1901) and the Oktoberfest special line, which headed for the festival site at the Bavariaring the first time in 1906, had a much longer existence than these exhibition lines.

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After the completion of the routes expansion in the inner city districts in 1908 the systematic development of the outlying districts began. The construction of long-distance routes, such as to the neighboring town of Pasing, was pressed ahead. The Pasing route was opened on December 16 ,1908 with Line 29 as so-called "assurance outer line". On July 25, 1909, Line 24 was opened from Stiglmaierplatz along Dachauer Straße to Leonrodstraße.

On August 12, 1910 the settlement and recreation area Grünwald was connected with the Isartal (Isar valley) Lines 25 and 35. These lines had largely their own track with Vignole rails and as few crossing points as possible. As in the days of the steam tramway, these routes were not just meant to connect people living out there to the city center, but were also used by residents of the inner city, especially on weekends, to get to the much frequented recreational areas.

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The expansion of the fleet was indispensable for the growing network of lines.

The exterior of the B-railcars, which were constructed starting from 1908, were of a somewhat more rounded appearance than the angular A-cars. While the A-cars were still built at Rathgeber's old production site on Marsstraße, the B-cars were built at the new company premises in Moosach. With the B-cars, a new white-blue paint scheme was introduced, which (with interruptions) held up to the R 2.2 cars.

The first five cars (375-379) had steering axles and were designated Type B 1. The remaining 45 wagons (380-424), designated Type B 2.3, were equipped with the proven maximum bogies. However, the steering axles proved as a failure. The B 1 cars were then also equipped with maximum bogies in 1909/10 and from then on referred to as B 1.3.

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The expansion course of the Munich tram was unbroken; after the A- and B-cars, more new cars had to come. A total of 100 C-cars were built between 1910 and 1913.

Many different manufacturers did get a turn in this:

Ten railcars of the type C 1.4 (425-434) were built by the main contractor Rathgeber, as well as 38 cars of the type C 1.6 (457-494), 27 copies of the type C 2.4 (499-502 and 506-525) and three C 2.7 cars numbered 503-505.

Another ten copies of the type C 4.5 (435-444) came from the Maschinenfabrik Augsburg-Nürnberg (MAN), while the 12-car type C 3.5 with the car numbers 445-456 were brought into existence at Lindner in Ammendorf.

Somthing that all C-cars had in common, were the new padded transverse seats, whose back rest could be switched over for the respective direction of travel (instead of the previously used longitudinal benches). This comfortable interior installation was very well received by the passengers.

In addition to the C-railcars matching c-trailers were ordered as well, but in contrast to the maximum chassis of the railcar they had a two-axle undercarriage. In addition to the 70 c 1.26 and the 101 c 3.27 cars, which were built at Rathgeber,  30 pieces of c 2.26 sidecars were constructed at the Waggonfabrik Bremen.

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Weiter: 1914 – 1919: Jahre der Stagnation

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