I'd say that it was more than just car industry propaganda that got rid of the trolly systems.
First, the trolly systems were privately owned. This is important for several reasons.
1) They didn't get government subsidies. Transit systems today are mostly funded through government subsidy (and I'm including roads as a "transit system"). If the government is going to pay for the roads via taxes, but you have to build and maintain your trolly tracks based on fare revenue, you won't make ends meet. People using your trolly system would still be paying the taxes to fund the roads which means that driving would end up comparatively cheap.
2) They were taxed. Most jurisdictions had a franchise tax on trolly systems (ie. they had to pay the city to operate). They also had to pay property taxes on the land they used. Again, roads don't pay property taxes and roads don't pay franchise taxes. From point #1, they're even subsidized.
3) One of the business models of a lot of trolly systems was building a line along a strip of land that you owned. You buy a lot of property along a linear space and then build a trolly bringing people to that area and the value of your real-estate skyrockets. You can run the trolly at a loss and make it up on the real-estate. Of course, once you start selling off that real-estate, you don't have a lot of incentive to invest in your trolly. When busses were replacing trolly systems, the trolly systems were pretty decrepit and in need of huge overhaul and replacement. [...]