Police in the state of Baden-Württemberg described the incident on X as a "suspected rampage".
Further details were initially unknown but there was no danger to the public, a spokeswoman added.
The 38-year-old German man stole an excavator from a construction company in the town of Grünsfeld, south of Frankfurt, where he reportedly destroyed the entire inventory.
He then drove the vehicle to another town, a few kilometres away, damaging several patrol cars and other vehicles during the journey.
Im Main-Tauber-Kreis kam es zu einer mutmaßlichen Amokfahrt. Ein Mann hat in Grünsfeld einen Bagger an sich genommen und hat damit Personen verletzt und zahlreich Fahrzeuge beschädigt. (1/2) — Polizei Heilbronn (@PolizeiHN) #MTK311224 pic.twitter.com/jgE4afArrEDecember 31, 2024
One policewoman injured during the incident was taken to hospital but has since been discharged.
The "rampage driver was stopped by gunfire" at a car dealership, the spokeswoman said.
He was resuscitated on-site but succumbed to his injuries at the scene.
The incident remains under investigation.
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