In 1939 there appeared the final production vehicle, the "Type 4/ZW", which was also called "ZW 38" by Daimler-Benz. A completely new running-gear design was used for this vehicle.
As before, both final drive systems, two bevel gears with a ratio of 4: 1, were mounted on the outside of the hull, each in a housing made of armor plate. The drive sprocket was made of cast steel and screwed to the flange axle of the final drive. Two interchangeable sprockets, each with 21 teeth, meshed with the tracks.
The idler wheel consisted of a hub onto which two wheel discs were welded. These were equipped with hardened guiding rings to direct the teeth of the tracks laterally. The idler wheel turned on roller bearings around a crank axle which was mounted in the rear of the hull. The tension on the tracks was created by adjusting this crank axle.
The three return rollers (size 310 x 70-302) turned on fixed pivots mounted in special blocks. They took the form of double wheels equipped with removable rubber tires, between which the teeth of the tracks were directed laterally by guiding rings.
The road wheels, 6 on each side (size 520 x 95-398), were likewise formed as double wheels and consisted of two steel plates welded onto a hub, with rims carrying full rubber tires. The teeth of the tracks were also guided laterally here by inner guiding rings. Every road wheel turned on an axle that was pressed into a swinging arm mounted on the hull. A torsion bar spring-a bar made of spring steel, with two toothed heads -contacted the swinging arm with one head, while the other was held by a nut near the mount of the swinging arm on the other side, the opposite side of the hull. The outer ends of the swinging arms were limited in their upward movement by rubber contact blocks. To absorb the lateral pressure, every swinging arm passed along a guiding rail attached to the armored hull.
To absorb pitching swing, the front and rear swinging arms on each side of the vehicle were each equipped with a hydraulic shock absorber working on one side.
The unlubricated tracks were composed of individual interlocking links held together by bolts. The track pitch amounted to 120 mm.
In technical terms, the larger Maybach Type HL 120 TR engine with two shaft-driven magnetos was used. From it a balance-weighted shaft carried the energy to the main clutch.
A Maybach Variorex SRG 32 8145 pre-selector gearbox was used in the transmission. The individual gears were selected in advance, but the shifting itself was done manually by a low-pressure system, in which a valve was activated as soon as the clutch pedal was stepped on. The gearbox included ten forward speeds and one reverse gear.
The bevel gears and the steering gears were attached to the gearbox in a single housing. From the steering gears, the power passed to the left and right, via two shafts, to the steering brakes and the final drive.
The support and steering brakes were servo-operated inside drum brakes, each with two brake shoes. Power transmission for steering operated hydraulically.
In the superstructure, there were double entry hatches in the sidewalls of the turret. In some of the Ausf. E tanks there was no visor to the right of the radio-operator's seat. Production of this Panzerkampfwagen III, Ausf. E continued until February of 1939; the chassis numbers were 60 401 to 61 000 (without 60 501 through 60 545).
The army regulations published on September 27, 1939 included the information that the "Panzerkampfwagen III (37mm) (Sd.Kh.141)" was being declared ready for introduction and use on the basis of successful troop testing.