While pursuing the Penguin's thugs Eagleton, Falcone and Sheldrake in their getaway vehicle, Batman and Robin stop short when a dividing bridge opens between them. The bridge comes down, crushing the Batmobile's front half.
The Batmobile limps to a secret garage operated by Earl Cooper, the Batmobile's designer and mechanic. He says he will need a few days to repair it, and in the meantime gives them two Batcycles to ride.
In the Penguin's hideout, Falcone brings an acquaintance to him, Arnold Rundle who works for an auto parts company. Rundle says that he has traced a pattern of exotic car parts being ordered and sent to one location: Earl's garage. Penguin is delighted.
Penguin and his thugs invade Earl's garage and take Earl and his daughter, Marva, hostage. At first, Earl refuses to help Penguin, who is intrigued to know why he is so loyal to Batman. Earl explains that Batman saved his life, twice. Earl was an engineer for a car company, who quit in protest when the company leaders refused to listen to his warnings about serious safety defects in one of their cars. His former bosses sent thugs after Earl, but Batman saved him. Several months later, Earl had been unable to find another job, when Batman appeared again in his run-down Batmobile and asked for Earl to design and build him a new one. After it was completed, Batman kept Earl on to maintain and upgrade it.
Penguin turns his attention to Marva, forcing Earl to cooperate.
Batman and Robin are called in to pick up the repaired Batmobile. With Falcone watching from the shadows, Earl tries to slip a warning to Batman, saying repeatedly that Marva is down "in the basement," and emphasizing that he has fixed the car's air conditioning.
As soon as they drive away, Penguin follows in his own car, taking Marva along as a hostage and leaving Falcone to guard Earl.
Earl has been forced to rig the Batmobile with a remote control held by Penguin. Penguin has a fine old time sending the car on a crazy ride, with the Dynamic Duo trapped inside and unable to control it. Batman presses the eject button, but it has been disabled. Finally, Penguin decides to end the game. He drives the Batmobile to the roof of a parking structure and prepares to send them off the edge. Batman realizes that "down in the basement" is a slang term in race car driving for crashing. Remembering what else Earl said, Batman presses the air conditioning switch, and the ejector seats fire, launching Robin and he to safety. The Batmobile goes off the edge and explodes, and Penguin believes he has won.
Back at the garage, Falcone receives the news of the Dynamic Duo's death with jubilation. Unable to contain himself, Earl knocks Falcone out and ties him up, then cries, believing that his friend is gone and his daughter is doomed.
Batman and Robin parachute down, and attack Penguin and his thugs. Penguin tries to get away, dragging Marva along, but Batman stops him and rescues her.
Batman apologizes to Earl for letting Penguin trace him, and assures him that from now on, future parts will be ordered through dummy corporations so no one else can. Earl, feeling no regrets, launches on an enthusiastic description of the newer, better Batmobile he's going to build.
At Stonegate Penitentiary, Penguin has been put to work in the license plate factory, scrubbing the finished plates. He comes across one that reads "1BAT4U", and tears it in half in a rage.