In order to design a well-performing hybrid storage system for trams, optimization of energy management strategy (EMS) and sizing is crucial. This paper proposes an improved EMS with energy interaction between the battery and supercapacitor and makes collaborative optimization on both sizing and EMS parameters to obtain the best working performance of the hybrid storage system. This paper demonstrates the whole process of the improvement of the EMS, the traction calculation, the parameter optimization, and the sizing optimization based on real tram and line conditions. The improved strategy is proven to be superior as it guarantees normal operation and avoids shutdown conditions when the supercapacitor is at a low voltage. Furthermore, the optimized sizing result largely decreases the weight of the storage system and obtains a long battery lifespan.