The film opens on a grainy video recording. A red British sports coupe named Leland Turbo speaks to the camera saying that his mission is failed and that he needs Finn McMissile's help. He jots in his GPS coordinates just as a pair of hatchbacks burst through the doors behind him, a commotion follows, and the video feed dies.
A fishing trawler, complete with eyes and mouth, cuts through the ocean. A small Aston Martin named Finn McMissile (Michael Caine) is parked on the trawler's deck. The trawler tells McMissile that they've arrived at the coordinates, but there is nothing but water for miles. A massive warship appears from the shadows. It draws it's guns on the trawler and demands that it leave immediately. The trawler swiftly obeys the order and turns around, and notices that Finn is no longer on board. The warship drifts back to it's home base, unaware that McMissile has attached himself to the back of the ship using a pair of grappling hooks. The two arrive at a massive oil platform in the middle of the ocean. Finn grapples onto one of the oil platform's supports, engages his magnetic tires, and swiftly makes his way to the top of the facility. From above he takes photos and spies on a meeting taking place between dozens of "lemons" (Pacers, Gremlins, etc.). Leland Turbo is nowhere to be seen. Professor Zundapp (Thomas Ketschmann), a micro car with an oversized monocle, appears and pries open a wooden crate revealing the cubed remains of Leland Turbo. All laugh maniacally, Finn cringes. Professor Z opens a second box, in which Finn sees a regular looking television camera. The lemons are soon alerted to Finn's presence and a massive chase/firefight ensues. Finn is soon cornered on the top-most platform of the oil rig. He peels out in reverse, plunging hundreds of feet into the water below. The secret agent sprouts water skis and rocket boosters which push him across the water like a speedboat. Professor Z's henchman take off after him. A massive rocket locks in on Finn and explodes, leaving a pile of smoking wreckage floating on the ocean surface. Finn McMissile has in fact, survived the explosion. He sprouts a pair of submarine fins, a scuba mask, and a pair of turbines on his rear, and silently escapes.
In Radiator Springs, Mater (Larry the Cable Guy) has resumed his towing job and is rescuing a stranded car on the side of the highway. This car has a tendency to leak oil, unlike Mater who has never had oil-leaking problems. Mater tows him back to town and realizes that Lightning McQueen (Owen Wilson) is back after winning his fourth Piston Cup. The two reminisce by visiting the Radiator Springs museum which is dedicated to the memory of the now-deceased Doc Hudson. Mater has exciting plans for them both, but McQueen cuts him off, saying that he would love to spend some time with Mater, but also wants to spend time with Sally (Bonnie Hunt), his girlfriend. That evening, Sally and Lightning head to the Wheel Well, which has now become a bustling hang-out for tourists. Mater arrives, dressed as a waiter, and interrupts Lightning and Sally's date. They take his intrusion with stride and order a couple of drinks. Mater heads to the bar where Guido is acting as a bartender. On TV, a Larry King-ish interviewer is speaking to Miles Axlerod (Eddie Izzard), a Richard Branson type capitalist, who has recently given up fossil fuels in favor of his own alternative fuel, "Allinol". Miles tells the interviewer of his plans to hold a World Grand Prix, wherein all the contestants will race using Allinol. One of the contestants, Francesco Bernoulli (John Turturro), an Italian F1 car, boasts of his speed and strengths and vows that he is unbeatable. The interviewer swiftly answers a call on the air; it's Mater. Mater claims that Lightning McQueen is superior to Bernoulli in every way and would drive circles around him. Bernoulli laughs off the claims and challenges McQueen to enter the race. McQueen takes over the phone call and accepts the challenge on the air.
At the airport, McQueen bid a farewell to Sally as he and his pit crew board a jumbo jet heading to the first leg of the Grand Prix: Japan. McQueen and Mater take in the sights of Tokyo, and head to a lavish party put on by Miles Axlerod. Elsewhere Finn McMissile and his spy-agency counterpart Holly Shiftwell (Emily Mortimer) learn that an American spy is at the party and their job is to intercept him and receive a package. At the party, Mater's antics prove embarrassing. He first mistakes a bowl of Wasabi for ice cream, goes screaming through the building and ultimately plops down on the stage between Lightning and Axlerod upon whom he mistakenly leaks a few gallons of oil. Lightning angrily tells Mater to go to the bathroom and clean himself up, while Bernoulli teases Mater and McQueen from afar. In the bathroom, Mater briefly meets eyes with an old yellow jalopy washing his hands. Mater enters a stall and is confused by the technological complexity of the bathroom stall. Outside of the stall the yellow beater sheds it's skin revealing a shiny blue Dodge Challenger beneath named Rod "Torque" Redline: the American Spy (Bruce Campbell). Two other lemons appear in the bathroom, and a gunfight takes place. Midway through the ruckus Mater exits the stall and apologetically makes his way to the exit, unaware that during the commotion Torque passed the package to Mater, by placing it on his undercarriage. Shiftwell arrives, and using her GPS locator, she is shocked to discover the the presumed American spy is Mater. Shocked, she follows Mater. Through sheer luck, Mater manages to answer her coded questions, further proving his spy identity to Shiftwell and McMissile. She sets up a rendezvous with Mater, who mistakes it to be a date, and they part ways. Later that evening Torque finds himself tied up and surrounded by Lemons in a warehouse. Professor Z mans the mysterious typical-looking television camera which is aimed directly at Torque. Zundapp explains that it is not a camera, but rather a heat-weapon which, when aimed at a car using Allinol, will cause it to burn out and eventually explode. They show Torque surveillance footage of the prior night's bathroom fight. They order him to point out the other spy who received the package. Torque refuses, but he twitches emotionally when Mater appears on screen. Professor Z orders his men to find Mater and to kill Torque.
The following morning the race is ready to begin. In the pit. Mater and Lightning's crew all wear headset microphones. The race begins. Above the race, McMissile and Shiftwell are surprised to see Mater attending the race in such a conspicuous manner. The two spot an unusually large concentration of lemon cars around the track. McMissile and Shiftwell battle the lemon cars in spectacular fashion and save Mater, but not before he incoherently narrates the strange goings-on of McMissile and Shiftwell. Mater's incoherent babbling, being fed to Lightning through his headset, cause Lightning to lose the race. Bernoulli repeatedly teases Lightning for losing. Lightning is angry at Mater. The next morning Lightning's pit crew is preparing to go to Italy while Mater has purchased a one-way ticket to Radiator Springs. At the airport Mater is escorted passed security by a disguised McMissile who is still convinced that Mater is the American spy they are looking for. Two of Professor Z's Lemons arrive and a chase takes place on the airport tarmac. McMissile's private jet Siddeley appears overhead, and the two manage to safely get on board. Back at the airport Lightning and his pit crew read a poorly scrawled note of Mater's telling him that he's gone back to Radiator Springs after causing Lightning to lose the race. Lightning feels rotten for blowing up at Mater.
On board McMissile's plane Shiftwell examines the package given to Mater by Torque. It is revealed to be a single photo of a car engine, belonging to the leader of the lemons (not Professor Z). Mater comments that the engine is nothing special: it belongs to a lemon, it looks like it leaks oil, and requires a lot of replacement parts. Also photographed are a few car parts Finn knows are only sold in Paris. Aboard the jet, Shiftwell fits Mater with a voice activated disguiser which will change his outward appearance to whatever he tells it to do. She also seeks to repair a large dent on Mater's bed. He refuses, saying that the dent is a part of him, and he would never repair it. The three head to Paris where they track down McMissile's usual informant who sold the Big Boss those parts. Through their investigation, it is revealed that the owner of the engine will hold a meeting along with his lemon-lieutenants in Italy the same day as the Grand Prix race. It is decided that Mater will be disguised as one of the lieutenant's tow trucks and will gain access to the meeting where he can identify the leader of the lemons and owner of the engine. The Italian race has begun. McMissile and Shiftwell stay to watch the race, and look out for lemons, while Mater infiltrates the meeting in disguise. In the meeting, it is revealed that the Big Boss is not attending in person due to engine trouble. A TV appears overhead upon which Mater sees a live-video of the Big Boss' engine block speaking to the room. The Big Boss' plan is revealed. He, and the rest of the Lemons are the owners of the world's largest untapped oil deposit, in the middle of the ocean. Miles Axlerod and his Allinol alternative fuel are threatening to put the Big Boss out of business, so they will use the camera/heat gun to destroy the WGP racers during the race broadcast, including Lightning McQueen. The world will assume that Allinol is dangerous and will continue to use gasoline. Mater is afraid for Lightning. Back at the race Lightning and Bernoulli are neck and neck but watch in horror as the rest of the racers explode by way of Professor Z's camera/heat gun. Lightning manages to beat Bernoulli on his home turf, but the win is bittersweet, given the amount of carnage that took place on the track. The Big Boss and his cronies anxiously watch the sports report. Miles Axlerod appears and reluctantly accepts that Allinol must be dangerous and tell the world that the final leg of the race will be run on gas. This pleases the Lemons. Moments later Lightning is interviewed, and asked if he too will run on gas. Lightning refuses, saying that he will continue to use Allinol. This angers the lemons and the Big Boss, who collectively aim to kill Lightning McQueen. Mater is shocked and accidentally sheds his disguise. The lemons draw their weapons, while Mater draws his and a firefight happens. Mater flees using a parasol and flies directly for Lightning, who is still swamped by press. Mater breaks through barricades and crowds, and is about to warn Lightning when he is kidnapped by lemons, thrown into a cargo container, and knocked out.
Mater dreams of his own foolishness, and lack of maturity demonstrated from scenes earlier in the film. He awakens inside of Big "Bentley" Clock Tower in London. He is tied up and is dangling a hundred feet over a dangerous set of gears. Below him, McMissile and Shiftwell are also tied up, about to be smashed by a pair of intersecting gears. They are being held captive by two lemons, who have the camera/heat gun aimed at McQueen who is sitting at the starting line. The two Lemons brag that they're going to kill Lightning. The race begins. The two lemons aim the gun at Lightning and pull the trigger. To their surprise Lightning does not explode. They try again and again, but he remains in tact. Annoyed the two turn to Mater and say that they have a back-up plan: they've planted a bomb in McQueen's pit and it will explode. The two Lemons quickly leave to meet with Professor Z. Mater and McMissile talk and McMissile finally understands that Mater's "foolish act" is not an act at all and that Mater is just Mater. Mater manages to free himself from his bonds and offers to save McMissile and Shiftwell, but he is told instead to go save his friends at the pit stop. Mater obliges and takes off to the race. In the clock tower, McMissile and Shiftwell are seconds from being smashed when she manages to reverse the polarity of the clock, which sends it in reverse and saves them both. Now free the two notice Mater's air filter discarded on the ground. They both realize that the bomb isn't in the pit stop; it's on Mater, in place of his air filter. Shiftwell sprouts a pair of wings while McMissile takes off on land to both save Mater and stop Professor Z from exploding the bomb. Mater haphazardly makes his way onto the track and surprises Lightning who seeks to apologize for his actions in Japan. Mater, now aware that HE is the bomb, seeks to outrun Lightning. He sprouts a pair of rocket boosters installed by Shiftwell, and bursts through the track wall into London. Professor Z tries exploding the bomb, but by now Mater is well out of range. McMissile arrives, and a chase takes place between the two of them. Professor Z arrives at the London docks, where his battleship is waiting for him to board. McMissile is close behind and manages to grapple himself to the Professor's back bumper. The battleship produces a giant magnet and a tug of war between the ship and McMissile occurs. McMissile is ultimately able to project a few grenades at the ship's magnet, which cause it to explode.
In the center of London Mater, Shiftwell and Lightning attempt to disarm his engine-mounted bomb. McMissile arrives towing a tied-up Professor Z. Despite his best efforts Mater is unable to unscrew the bomb from his engine, citing that the screws are only used in Lemons. Using voice activation Mater attempts to disarm the bomb, but discovers that the bomb has a fail-safe for such a scenario. It begins counting down from 5 minutes. McMissile and Shiftwell theorize that the bomb can only be disarmed by the car's voice that armed it. They demand that Professor Z disarm it. He obliges, but the good guys are shocked to find the clock tick from 5 to 4 minutes; meaning that Professor Z did not arm the bomb.
With less than four minutes left, Mater wraps his mind around the situation, and believes that he's discovered the identity of the Big Boss, who should be able to disarm the bomb using his voice. Mater, using his rockets, blasts across London to the race's finish line. There he finds Miles Axlerod, and the Queen of England. Mater forces Axlerod to open his hood and reveal his engine. Axlerod refuses citing that he is an electric car and doesn't use oil. The bomb's timer ticks down from ten as Mater is nose to nose with Axlerod. With the timer at 1 Axlerod disarms the bomb. He admits that he is the Big Boss and that he isn't an electric car and that Allinol is just regular gasoline. He asks why Lightning didn't explode when the camera/heat gun was aimed at him. Lighting responds that he got his Allinol from Fillmore. Fillmore admits that he used his own alternative fuel in place of the Allinol, because it was crap.
As thanks for stopping Axlerod's plans, Mater is knighted by the Queen. The group returns to Radiator Springs where Mater is as much a celebrity as Lightning. He brags about his flying British girlfriend (a claim that is met with lot of skepticism.) McMissle and Shiftwell arrive, where it is confirmed that Mater and Shiftwell are an item and that she is now sporting her own dent which she refuses to fix (like Mater). Siddely arrives and tells McMissile and Shiftwell that they've been called onto another mission and that the Queen has personally requested Mater's involvement. Mater turns them down, saying that he's happy to be home towing cars, and doesn't want to leave on another adventure just yet. Shiftwell says she'll return soon, and they all take off.
Back in Radiator Springs the same racing cars from the WGP are invited to an inaugural Radiator Springs race, free of press, video cameras, bright lights and parties. Lightning jokes with Bernouli, and the race begins.
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