The film starts with Lightning McQueen (Owen Wilson) psyching himself up for his race. With him is Mater (Larry The Cable Guy). As Lightning continues his mantra, he remembers some words from his old mentor Doc Hudson (Paul Newman). He then hits the track and gets to racing.
Lightning continues his hot streak while teasing his buddies/fellow racers Bobby Swift (Angel Oquendo) and Cal Weathers (Kyle Petty). All of his friends from Radiator Springs are there to cheer him on. Soon, however, Lightning finds himself surpassed by tech-powered rookie Jackson Storm (Armie Hammer), who goes as fast as 208 MPH, versus Lightning's 196. Storm makes it clear to Lightning that he intends to be the new top racer. Bobby and Cal, plus other older racers, are starting to retire as Storm and a new generation are taking over. Lightning's former rival Chick Hicks (Bob Peterson) and co-commentator Natalie Certain (Kerry Washington) report on Storm's victory and Lightning's sudden decline.
Lightning is entering another race. He starts to take the lead, but Storm catches up real fast and once again leads Lightning. Lightning attempts to go faster, only for one of his tires to blow out. This causes him to barrel roll and send him crashing off the track. His crew rushes to his aide.
Four months later, Lightning is still recovering back in Radiator Springs. He is watching an old video of Doc's last race in a shed. Doc also crashed horribly, and that's where his career ended. Lightning's girlfriend Sally (Bonnie Hunt) enters the shed to try and cheer Lightning up. He insists he doesn't want to end up like Doc, being told when it's his time to quit. Lightning then makes an announcement in front of all his friends that he plans to keep on going and make this the best season of his career.
Lightning heads up to the Rust-eze Racing Center with Mack (John Ratzenburger), Luigi (Tony Shalhoub), and Guido (Guido Quaroni) to begin training for the season. The owners, Rusty and Dusty (Tom and Ray Magliozzi), are excited to see Lightning, but they tell him that they have sold the company to another car named Sterling (Nathan Fillion). Sterling is also a big fan of Lightning, having included multiple tributes to his racing career in the facility. He equips Lightning with an electronic suit to monitor his speed and vital signs. Sterling shows Lightning around and introduces him to his new trainer, Cruz Ramirez (Cristela Alonzo).
Cruz puts Lightning through exercises that he finds tedious. He sees that they use a special simulator and he wants to try it out, although Cruz wants to save that for later, but Lightning is insistent. Cruz adds Storm to the simulation for a challenge, but Lightning's attempt to outrun Storm causes him to veer off-course and head-on into the simulator, destroying it and causing a blackout in the whole facility.
Sterling brings Lightning into his office, which is filled with tons of Lightning-based merchandise. Since Sterling thinks Lightning's racing days are behind him, he wants to use him to endorse all of these products. However, Lightning really wants to race in the Florida 500. He offers Sterling a deal: if he wins the race, he decides when he retires, and if he loses, he will gladly help sell all the merchandise. Sterling accepts the deal and has Lightning continue training with Cruz at Fireball Beach.
Lightning and Cruz head to the beach for some exercises, but Cruz has never trained anyone outside the facility. This time, Lightning shows her how to drive fast on sandy terrain. Cruz has a rough start, but she starts to get the hang of it.
Lightning comes across a sign pointing to Thunder Hollow, where he can get some more racing practice in. To avoid being spotted by paparazzi, Mack helps Lightning disguise himself by completely covering him in mud. Cruz joins him and gets her own racing number. To their surprise, this race turns out to be a demolition derby. They try to escape, but they are forced to participate. The reigning champion, a monster school bus named Ms. Fritter (Lea Delaria), goes right after the rookies. Ms. Fritter nearly gets Cruz with her built-in buzzsaw, but Lightning gets her out of the way, knocking Ms. Fritter over. She angrily gets up and goes after Lightning, but she crashes into a wall. Cruz is declared the winner as she is the last one standing. A water truck goes onto the field and gets knocked over, splashing Lightning with water and revealing him to the crowd.
Lightning and Cruz are riding in Mack with Cruz's trophy. News of Lightning's appearance in Thunder Hollow is seen all over TV, showing that even Ms. Fritter is a big Lightning McQueen fan. Cruz is excited for having won a race, but Lightning is annoyed because he feels he needs to be the winner and that he was outdone by a trainer. He bangs against the window, causing Cruz's trophy to break. Cruz tells Mack to pull over. She gets out and tells Lightning about how she always dreamed of being a racer, even though her own family told her she shouldn't go for it. When she finally got her shot, she backed out because she felt she couldn't hold her own against the more seasoned racers. Lightning suddenly feels guilty.
That night, Lightning calls Mater saying he wishes he could have some advice from Doc. Mater tells him that the only other car that knew more about racing than Doc would be the one that trained him.
Lightning and Cruz go to Thomasville where they find Smokey (Chris Cooper), Doc's former trainer. He takes them to a bar where Lightning meets legendary racers River Scott (Isiah Whitlock, Jr), Junior "Midnight" Moon (Junior Johnson), and Louise "Barnstormer" Nash (Margo Martindale). They all reminisce about Doc and the old racing days.
Lightning goes out with Smokey and mentions how he may never race again if he loses, and how he doesn't want to end up like Doc. Smokey says that after Doc was forced to quit, he holed himself up in Radiator Springs and Smokey stopped hearing from him, until one day when Doc began sending letters. Smokey shows Lightning a wall of newspaper clippings with Lightning's multiple wins since Doc started coaching him. Smokey tells Lightning that racing wasn't the best part of Doc's life, but rather the fact that he got to coach Lightning.
Smokey helps Lightning out to prepare himself for the big race. He tells Lightning that while he may not outrun Storm, he can outsmart him. Along with Cruz and the older racers, they go through training exercises by driving through the woods or through a field of cow-tractors. Lightning gets better and better, but Cruz still proves to be a faster racer.
Lightning and Cruz go to a drive-in and see old videos of Doc racing. During one race, another car tried to ram Doc against the wall, but Doc managed to flip himself over the other car and move ahead to win.
Lightning gets in one last practice round before the big race. Everyone in Florida is waiting for him to show up, and all the tech-racers are confident they will beat him. Lightning arrives in Florida with all his friends and heads into the race. He starts in last place since he missed the qualifiers. As the race goes on, Lightning picks up speed. He overhears Sterling talking to Cruz and harshly telling her to go back to the racing center. Lightning goes in for a pit stop and tells Cruz to come back. To everyone's surprise, Lightning has Cruz sub for him. Sterling attempts to stop this but Mater gets in his way. Lightning has Guido and Luigi fix Cruz up with fresh tires, plus a paint job from Ramon (Cheech Marin). Cruz gets into the race.
Cruz is nervous at first, but with encouragement from Lightning and Smokey, she gets further and further in the lead until she is catching up to Storm. He tries to block her from getting ahead of him, but Cruz keeps pushing. Storm pulls back to drive next to Cruz and attempts to discourage her by intimidating her. Lightning overhears and tells Cruz not to let Storm get in her head, because he wouldn't be doing this if he didn't feel threatened by her. Cruz starts to gain a lead on Storm, but he tries ramming her against the wall. Cruz takes one out of Doc's handbook and pushes against the wall, flipping herself over Storm, and she manages to defeat him and win the race! The crowd goes wild.
In the pit, Lightning congratulates Cruz on her victory. Sterling comes over to try and get Cruz to race for Rust-eze, but she turns him down flat. Tex Dinoco (Humpy Wheeler) shows up and offers Cruz a chance to race for him, which she accepts. Sterling then figures Lightning will just start endorsing products for him, until the scoreboard declares Lightning a winner as well, as he started the race, even if Cruz finished it. Therefore, Lightning doesn't have to retire. Tex then takes Sterling out to talk business.
Back in Radiator Springs, Lightning and Cruz are getting ready to race for their friends. Cruz has her own number now, and Lightning has a new paint job, with the name "The Fabulous Lightning McQueen" on his side, in honor of Doc. Tex has bought Rust-eze, so now Lightning and Cruz both work for him. The two then race alongside each other.
*CUT TO THE CHASE*
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Lightning McQueen is being outdone by a new generation of tech-heavy racers, led by rookie Jackson Storm. Lightning gets into a wreck after a race, and he worries he will end up like his mentor Doc Hudson, being forced to retire when he wasn't ready.
Lightning wants to keep going, so he starts training under Cruz Ramirez, who has always had her own aspirations to become a racer. She and Lightning race together during practice runs while also racing in a demolition derby and under the tutelage of Doc's former mentor Smokey.
During the final big race, Lightning is pushing to gain speed on Storm, but he decides he wants to give Cruz her shot at the big time. Cruz proves to be a fast racer, but Storm attempts to hold her back. When he tries to ram her against the wall, Cruz outsmarts him by flipping herself over him, allowing her to win the race. Lightning also wins since he started the race.
Lightning and Cruz now race for Dinoco, both having gained a newfound sense of pride, as well as new friends.
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