Lightning McQueen, now a seven-time Piston Cup racing legend, finds himself overshadowed by Jackson Storm, an arrogant rookie who belongs to a new generation of racers that use the latest technology to improve their racing performance. This causes McQueen’s fellow veterans to either be retired or fired by their sponsors to make way for the new rookies. In the final race of the season, as he tries to catch up to Storm and the other leaders, McQueen suffers a violent, nearly fatal rollover crash, leaving him badly injured.
Four months later, while recovering in Radiator Springs, McQueen isolates himself from his friends, and spends his time watching footage of his late mentor, Doc Hudson. Confronted by his girlfriend, Sally Carrera, McQueen fears being forced into retirement as Doc was. Rusty and Dusty, the owners of McQueen’s Rust-eze racing team, send him to a new state-of-the-art racing center, much to his surprise. When he arrives, he learns that they have sold Rust-eze to a new owner, Sterling, who assigns him to work with trainer Cruz Ramirez. McQueen eventually becomes impatient and annoyed with Cruz’s methods, and attempts to use a high-tech racing simulator, only to cause severe damage to the equipment.
Convinced that McQueen is no longer capable of winning, Sterling is ready to take him off the racing circuit, and use him for product endorsements. McQueen offers a deal instead – if McQueen wins the first race of the upcoming season in Florida, he can decide when he retires; otherwise, he will retire immediately. Sterling accepts the deal, but assigns Cruz to work with him one-on-one. Instead of improving his own top speed, McQueen spends most of the day helping Cruz get used to racing on the sandy coastline outside of the training center. For inspiration, they travel to a dirt track on which Doc raced, but inadvertently end up competing in a demolition derby, which Cruz ultimately wins. Distraught at the apparent waste of training time, McQueen rages at Cruz and, in the process, accidentally breaks her trophy. Upset, Cruz reveals that she had wanted to race professionally just like McQueen all her life, but never started a race, because she felt outclassed. She resigns as McQueen’s trainer, and starts back to the training center.