The H3-hybrid project is an initiative of the Eco Rail Innovation programme launched by DB and 19 partner companies and organisations in March 2011. Three locomotives have also been purchased by Volkswagen with an option for more.

The three-axle 100km/h locomotive is powered by a 350kW stage IIIB-compatible diesel generator and batteries, and is expected to spend between 50 and 70% of its operational time in battery mode. As a result, the H3 should consume between 30 and 50% less fuel than a conventional diesel shunter and cut pollution emissions by more than 50%. The axles can steer independently to reduce wheel wear in curves.

The DB locomotives will undergo eight years of trial operation in Würzburg and Nuremberg starting in 2015 to verify their performance in daily service ahead of potential series production. The German state of Bavaria is providing €600,000 to support the project.