

Speed, Spritle, and Chim Chim take the Mach 5 out for a test drive. The radio announces that Tongue Blaggard has escaped from prison. The Racers meet a girl and her grandfather whose Model T has broken down on the road. Speed offers to help, but the old man declines. Later, the Racers find the broken down Model T again. This time, the old man accepts Speed's help. While the Racers dine with the old man, the granddaughter, and his adopted children, Blaggard steals the Model T, hoping that it is the one that once belonged to the crook Light Fingers Clepto. Speed vows to recover the stolen vehicle. The old man, unashamed, tells who his father was. Trixie spots the Model T from her helicopter and brings it into Pops' garage for repairs. Before long, a line of Model T's has formed, all with engine trouble. Speed finds this peculiar and uncovers the old man's original engine, finding a secret code number etched on it by Light Fingers Clepto (the old man's father).
After winning a practice race, Speed Racer is offered a position on a team set to race in the Grand Prix. The company who employs his father, Pops Racer, a top engineer, owns the team. However, Speed declines because Pops doesn't want him to become a pro. Meanwhile, Pops quits when his plans to improve the Mach 5 are rejected. While Pops and Speed are driving home, a gang of motorcycle racers steals their plans. Trixie, in her helicopter, runs the gang off the road and the plans are recovered. Back at the cyclist headquarters, bad guy Acey Ducey shows up and offers to get the plans for "5,000 clams." He confronts Pops but leaves empty-handed as Pops has hidden the designs on the Mach 5's windshield using invisible ink. Deciding to sell the Mach 5 so Pops can rebuild the engine, Speed visits Sparky, who suggests that Speed enter the Sword Mountain Race for a $5,000 prize. While Speed takes the Mach 5 out for a road test, "dirty driver" Duggery rams the car, causing it to blow a tire.
Speed resumes the Sword Mountain Race, neck and neck with Duggery. Ace and his gang approach from the opposite direction. Speed swerves off the road and uses his rotary saws to cut a path through the overgrown terrain. Trixie creates a temporary distraction, bombing the gang with smoke flares from her plane. At a cross-road, Duggery decides to take a "shortcut." Speed knows that the road leads to a dangerous volcano and sets out to rescue him. Meanwhile, Ace and his gang fire at Trixie. The plane plummets but Trixie escapes. At the edge of the volcano, Duggery is thrown from his car, and left dangling from a rock. Speed also ends up on a rock shelf after trying to rescue his competitor. They manage to reach safety but find that the gang surrounds the Mach 5, with Trixie taken hostage. Spritle and Chim Chim, who have hidden in the Mach 5's trunk, throw rocks at the gang while Speed, Duggery, and Trixie fight them off. Ace takes off in the Mach 5. Speed follows in hot pursuit.