In watching this I always questioned, were cole and rowdy ever friends? Or just competitors.
Duvall says something about burns that "he's mean and he'll crash you into the wall to beat you in a race, I'm paraphrasing of course"
It's one of the understated appreciations of the movie - but, yes, they go from being fierce rivals to friends. If I'm not mistaken, after the scene where they rent the cars and beat them up and then trade the smiles at dinner - they're pretty much friends after that.
Duvall only says what he says because he's trying to get Cole not to race.
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