With their Japantown base destroyed, Team Arch decides to build a new one outside Japantown as a way to prevent the community from being destroyed again. Unfortunately, they are having trouble with finding a new location for their new headquarters. To make things worse, the city is the only group that could help them. Other agencies are unable to help due to their own respective problems, especially the CIA, as Austin and his team have resigned from the agency after the Ground-Pounder disaster, effectively ending their liaison role. In response, SpongeBob has decided to bring them into the new base.
Despite eventually finding a location, planning on how to build it, and gathering the materials, the team is low on money for any construction company to build it. Fortunately, they discover the MegaCali Race, a race that circles around California all the way back to Los Angeles, which serves as the Start and Finish Line; the prize money that they're offering is more the enough for the team to construct their new base. After some debating, the team allows Kaz and his group, the Junior Extreme Team (JET), to compete in the race. Despite failing to qualify, JET eventually enters on a legal technicality, as one of the other qualifiers was caught with an illegal fuel.
Arriving in Los Angeles, JET meets other racers, some were respectful, and others were rude. Among the latter is Royston Slinger, a rude and conceited 3-time champion racer who's never shy with using dirty tricks in his races. JET befriends Ricardo Campo, a quirky, friendly Mexican racer looking to save the reputation of his home country. His quirkiness causes him to fall in love with Roxanne Blanc, a young French racer looking to provide help for anyone in need. Meanwhile, Myron begins to fall in love with Sanya Vega, a young and very supportive racer from Neshoba County, Mississippi, but Shiro has trouble trusting her due to her reputation as a Southern State native. While the racers compete on the ground, their respective pit crews, including Team Arch serving as JET's, will travel by air to each finish line. During the first leg leading up north, Kaz, Fiona, and Myron get involved in a crash that puts them in last place. Shiro meanwhile manages to finish in 2nd, just behind Slinger.
During the second leg, Fiona shows good sportsmanship by helping another racer, Palmer Maddox, a young English racer, from crashing, earning his respect. Despite JET finishing in last again, their sportsmanship slightly overshadows Slinger's second victory, much to his dismay.
During the third leg, Myron and Sanya inadvertently get separated from everyone else, leading them to forge their own route. Sanya advises Myron to go trough a supposedly abandoned tunnel, which he does. However, Myron nearly dodges a train, showing that the tunnel is still active, and loses sight of Sanya. Miraculously, Myron reaches the third finish line before everyone else, placing him in 1st Place of the third leg.
During the fourth leg, Fiona and Ricardo have a small debate over how Ricardo should approach Roxanne. Gaining a lead, the two bet that whoever wins the fourth leg, their idea will be used. Ricardo wins, with Fiona coming in behind, but decides to use his idea at the fifth leg's finish line out of sportsmanship towards JET. While the racers rest up, Shiro eavesdrops on an exchange between Slinger and Sanya, discovering that Sanya purposely gave Myron bad advice in exchange for a new engine part from Slinger. Shiro coldly confronts them about nearly getting Myron killed, unaware of Myron listening in on it.
Kaz manages to win the fifth leg, and helps Fiona and Ricardo with serenading Roxanne with a romantic song, which somehow works. Meanwhile, Myron and Shiro have an argument about Sanya and her bad advice from the third leg, resulting in Myron confessing his love for her, unaware that Sanya and Slinger were listening.
During the sixth leg, Slinger, refusing to lose the race, dispatches his henchmen, Jester and Fester, to mess with JET. However, the henchmen only succeed in clipping off Kaz's navigation antenna. Lost and low on fuel, Kaz arrives at a military base. Armed with only his futuristic Colt (made by Sandy), Kaz explores the base, nearly getting killed by the base's soldiers, whose general, Joel Pierce, calls them off, recognizing Kaz as a childhood friend. They allow him to refuel his racing buggy, while giving him a tour of the base. Finding the a wall of plaques featuring famous soldiers, Kaz discovers that one of them, Jock Sunders, was Shiro's granduncle from the Civil Rights Era.
Meanwhile, the rest of the racers, including JET, soon discover Kaz's absence. Shiro confronts Slinger again, but Slinger rudely dismisses him. Shiro lashes out on Myron, leading to a fistfight between them, which is quickly broken up Fiona and Sanya, who gets shoved by Shiro, calling her a "southern scumbag", before coldly leaving the three. Myron comforts a crying Sanya, while Slinger coldly watches them, smirking at JET's possible disbandment.
Kaz parts ways with the base, and continues onto the sixth finish line, while Myron goes out to look for him. During the search, Myron inadvertently crashes, severely damaging his buggy, and severely injuring his eye, almost blinding him. However, he is rescued by Kaz, while Team Arch retrieves Myron's buggy. Arriving at the sixth finish line, Myron coldly blames Shiro for his crash and for Kaz getting lost, before loudly quitting JET. Kaz, angered by Shiro as well, confronts him about Jock. Shiro confesses that his hatred towards the Southern States was from Jock's role in the Civil Rights Era.
During the Civil Rights Era, Jock had been fighting against racial segregation in the South, having been influenced by his childhood, where he was constantly bullied just for making friends with non-Caucasians. In Mississippi, the most dangerous of these states, Jock participated in a peaceful protest, which is quickly put down by a mysterious sniper, resulting in 12 fatalities, including Jock. The massacre was investigated, and the FBI caught the orchestrators, but not the sniper. Believing that justice wasn't served properly, Shawn Sunders, Shiro's grandfather and Jock's older brother, developed a hatred towards the American South, even after they had finally changed their ways. The hatred was passed down before ending up in Shiro's possession.
True to his grandfather's word, Shiro swore to never trust a human being from the American South. Understanding Shiro's pain, Kaz confesses that he lost someone in his family, and encourages Shiro to move on, as well as the rest of the Sutherland Family.
Meanwhile, Myron considers dropping out of the race, but Sanya encourages him to continue, resulting in the other racers donating parts to repair his damaged buggy. After fixing his buggy, Myron rejoins JET, only to learn that Shiro left out of guilt.
In the seventh and final leg of the race leading back to Los Angeles, Swinger and his henchmen proceed to play dirty with JET, but Sanya and a redeemed Shiro come to their rescue, trapping Jester and Fester. Fed up, Slinger angrily clips Sanya, causing her to crash into Kaz and Fiona, resulting in Myron and Shiro going back to help them. While Shiro helps the girls, Kaz and Myron continue the race together, much to Slinger's dismay. Just as Slinger closes in on the finish line, his conceitedness gets the better of him, as he slows for the cameras, allowing the boys pass him and win the race, while he crashes into his starting garage, crippling his racing buggy.
Afterwards, Sanya joins JET and Team Arch, who use their prize money to build their new base, naming it the Arch Foundation. Soon after, the team receives a call from General Pierce, who's offering SpongeBob a special assignment. The movie ends with Team Arch listening to his offer.
In the post-credits, Slinger and his henchmen watch a sports news coverage, which shows Shiro and Sanya exposing Slinger's dirty tactics, as well as finding evidence about his tactics from his previous races. In response, the MCR's committee, seeing how the race has been scorned by Slinger's reputation, has decided to disqualify Slinger from all of his races, placing him last place in each of them, and stripping him of his championships, which are given to the previous three runner-ups. Destroying the television in a fit of rage, seeing that he's practically erased from existence, Slinger turns to the criminal life, swearing revenge on JET, and declaring that he won't stop until he takes away everything and everyone they love.
