A fuel cell tram has been developed by German engineers which saves on emissions and also boasts new technology.

The AutoTram is powered by a fuel cell motor and massive flywheel that continues to rotate when the vehicle is stationary, thus using energy more efficiently.

The vehicle, which runs on 25 per cent less fuel than comparable municipal buses, should be able to carry 300 passengers at once, the Deutsche Presse-Agentur reports.

Engineers claim the vehicle, which has rubber wheels, has the advantages of a tram without the cost of having to lay tracks and electric wires.

It features an optical tracking system, which uses sensors to look for lines painted on the road to help the driver stay on track. All three axles of the prototype can be steered, making the vehicle more manoeuvrable.

The power system is an 80-kilowatt fuel cell supplied by Ballard Power Systems and backed up by a compact CCM Nuenen flywheel that can contribute up to 325 kilowatts.

In an innovative measure, the energy saved while the tram is stationary is not saved to an electric battery, as with the Toyota Prius, but is instead saved as rotational energy in the flywheel and fed straight back to the wheels as needed.

The prototype was developed by the Fraunhofer Institute for Transport and Infrastructure Systems (IVI) in Dresden.