The original 205 T16 competition cars (VINs C1 to C20) used a rear spaceframe constructed from a combination of sheet steel profiles and tubular steel sections. When Peugeot Talbot Sport built the Evolution 2 series (VINs C201 onwards), the rear spaceframe was redesigned to be composed entirely of tubular sections, eliminating the sheet steel elements. This change simplified construction, reduced weight, and improved the structural rigidity and repairability of the rear of the car. The fundamental mid-engine, four-wheel-drive layout and 1,775 cc KKK-turbocharged 16-valve engine architecture remained unchanged from the original T16.
Competition power outputs of the T16 in full E2 specification were substantially higher than the road car's 200 PS. The factory competition cars were capable of outputs that placed them among the most powerful Group B cars ever built, though Peugeot Talbot Sport did not publicly disclose precise competition power figures. The car retained Bosch K-Jetronic fuel injection, the transversely-mounted Citroen SM-sourced gearbox, and the permanent four-wheel-drive system inherited from the original T16.
The 1986 WRC season saw the T16 E2 face its toughest opposition in the form of the Lancia Delta S4 and the Audi Sport Quattro S1 E2, both representing the extreme development peaks of their respective programmes. Peugeot's driver lineup included Juha Kankkunen and Bruno Saby, and Kankkunen's consistent performance across the season delivered him the Drivers' Championship. Peugeot simultaneously secured the Manufacturers' title for a second consecutive year.
The 1986 season was, however, tragically cut short by a series of fatal accidents involving Group B cars from multiple manufacturers. Henri Toivonen and co-driver Sergio Cresto were killed in a Lancia Delta S4 at the Tour de Corse in May 1986. A spectator fatality at the Rally of Portugal and further accidents during the season led the FIA to announce the abolition of Group B, with the new Group A regulations taking effect from 1987. The T16 E2 contested only a partial season before the category was terminated.
The 205 T16 E2 ended its competition life unbeaten in the sense that the Group B era was cancelled before any car could dislodge Peugeot from championship dominance. The programme's two Manufacturers' titles and two Drivers' titles (Timo Salonen in 1985, Juha Kankkunen in 1986) represent the most complete run of Group B success. The T16's combination of mid-engine packaging, turbo power, and four-wheel drive established a template that Peugeot would revisit with future rally and hill-climb programmes. The chassis architecture and engine from the T16 also underpinned the Peugeot Quasar concept car, while Peugeot Talbot Sport's Group B experience directly informed the team's continued work in international motorsport under Jean Todt in the years following Group B's closure.