The type 3 quadricycle marked the conclusion of the brief collaboration between Armand Peugeot and Léon Serpollet for the construction in 1889 of a steam powered tricycle. Armand Peugeot realised that the petrol engine, the only way of making a light and reliable car, was the best solution for the future of the automobile. His decision to use Gottlieb Daimler's engine was reinforced following a meeting with Daimler and Emile Levassor in 1988. The company Panhard et Levassor held the license to manufacture this engine in France, so an agreement was made to supply these engines that Peugeot would require.

The little Daimler engine was first fitted to the first type 2 two-seater quadricycle, four of which were built between 1890 and 1891 as prototypes. In 1891, the engine appeared in the type 3 quadricycle, a four-seater car with inward-facing seats. Mounted at the rear, the 565 cc v-twin 2 hp engine propelled the car to 18 km/h. Transmission was chain-driven. Unlike the type 2 that was fitted with a tiller, the type 3 had a vertical control for the steering.

To demonstrate the robustness of his product, Armand Peugeot, who had a flair for publicity, sent a type 3 to follow the famous Paris-Brest cycle race in 1891. The vehicle followed, with no major complications, the Valentigney-Paris-Brest itinerary and return journey, 2,045 km, covered over an average of 14,710 km. This was a colossal distance for the time and this feat caused a sensation, the press publicising this widely. Upon its return to Valentigney, the quadricycle was revised before being delivered to the first owner of a Peugeot automobile vehicle.

64 examples of this first real Peugeot production model fitted with modern mechanics for the time were manufactured at the factory in Valentigney. This continued until 1894. The first steps had been made. The Peugeot adventure was about to begin.