Lightning McQueen, now a seven-time Piston Cup racing legend, and the other veterans of the Piston Cup, find themselves being displaced by the next-generation rookies such as Jackson Storm, outfitted with the latest technology to break speed records. As the season progresses, the amount of new racers begin to increase, resulting in many veterans either retiring, or being fired by their sponsors, to make way for the new generation. Then, in the last race of the season, McQueen tries to catch up to Storm and the other leaders, but one of his back tires blows up, his engine overheats, and he loses control and gets into a violent 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, whose career ended in a similar accident, and McQueen fears that he might meet the same fate. After receiving some encouragement from his girlfriend, Sally, McQueen decides to continue racing and call his sponsors from Rust-eze, Rusty and Dusty, who surprise him by telling him they opened a new state-of-the-art training center known as the Rust-eze Racing Center, only to reveal that they have sold the team to a new owner, Sterling. There, McQueen meets Sterling, and is assigned to train under Cruz Ramirez. McQueen becomes impatient with Cruz’s methodical approach to training, and he attempts to use a high tech racing simulator – only to end up damaging it. Sterling decides that McQueen is unfit to race, and instead, plans to use him for promotional materials only. McQueen contests this, and instead, makes a deal; if he should win the first race of the season, he will get to determine when he retires, otherwise he will retire on the spot. Sterling accepts the deal, but assigns him to work one-on-one with Cruz.
McQueen tries to train on the nearby Fireball Beach in order to build up his speed, but he finds most of his time spent on teaching Cruz how to drive on various terrain. McQueen then attempts to race at a dirt track called Thunder Hollow, and inadvertently ends up competing in a demolition derby called ″Crazy Eight″ that Cruz wins, and her elation leads to McQueen’s humiliation on TV. Angry for apparently wasting training time, McQueen rages at Cruz and in the process accidentally breaks her trophy. Upset, Cruz reveals that she had wanted to be a professional racer like McQueen her whole life because he inspired her, but never started a race due to feeling intimidated and outclassed by the other race cars. She resigns as McQueen’s trainer, and heads back to the training center.