It's basically all down to hub speed. If you have a larger rolling diameter for the same hub speed, the car will be going faster (points further out on a radius are going faster than points nearer the hub). The speedo will read lower than the speed the car is going. On the other hand if you have a smaller rolling diameter tyre for hub speed, the speedo will read too high.
He knows what he means, just hasn't explained it very well. He's saying that no matter what wheel tyre combination you put on, the car will think it's going Z speed, even though it isn't.







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