The original Hot Wheels were made by Elliot Handler.[3] Handler discovered his son Kenneth playing with Matchbox cars and decided to create a line to compete with Matchbox. Hot Wheels were originally conceived by Handler to be more like "hot rod" cars (i.e., customized/modified or even caricaturized or fantasy cars, often with big rear tires, superchargers, flame paint-jobs, outlandish proportions, hood blowers, etc.), as compared to Matchbox cars which were generally small-scale models of production cars.[4] He began producing the cars with assistance from fellow engineer Jack Ryan. The flame logo was designed by Rick Irons, an art director working at Mattel at the time.

The first line of Hot Wheels cars, known as The Original Sweet 16 was manufactured in 1967. These were the first of the Red Line Series, named for the tires which had a red pin stripe on their sides.[5]

There were sixteen castings released, eleven of them designed by Harry Bentley Bradley with assistance from Handler and Ryan.[6] The first one produced was a dark blue "Custom Camaro".[1] Bradley was from the car industry and had designed the body for the (full-sized) Dodge Deora concept car and the Custom Fleetside, (based on his own customized 1966 El Camino).

In addition to the cars themselves, Mattel produced a racing track set (sold separately). Though it would be updated throughout the years, the original track set consists of a series of bright orange road sections (pieced together to form an oblong, circular race track), with one (or sometimes two) "superchargers" (faux service stations through which cars passed on the tracks, featuring battery-powered spinning wheels, which would propel the cars along the tracks).[7] Hot Wheels' use of wide, hard-plastic tires created much less friction and tracked more smoothly than the narrow metal or plastic wheels used on contemporary Matchbox cars. Hot Wheels cars were designed to roll easily and at high speeds, which was a great innovation at the time.[8]

The Hot Wheels brand was a staggering success. The series completely disrupted the industry for small die-cast car models from 1968 onward, forcing the competition at Matchbox and elsewhere to completely rethink their concepts, and to scramble to try to recover lost ground. Harry Bentley Bradley did not think that would be the case and had quit Mattel to go back to the car industry. When the company asked him to come back, he recommended a good friend, Ira Gilford. Gilford, who had just left Chrysler, quickly accepted the job of designing the next Hot Wheels models. Some of Hot Wheels' greatest cars, such as the Twin Mill and Splittin' Image, came from Ira Gilford's drawing board.[6] The Twin Mill was introduced in 1969 and was used to create the company's first full-scale replica car in 2001.[9]

The success of the 1968 line was solidified and consolidated with the 1969 releases, with which Hot Wheels effectively established itself as the hottest brand of small toy car models in the USA. Splittin' Image, Torero, Turbofire, and Twin Mill were part of the "Show & Go" series and are the very first original in-house designs by Hot Wheels.

The initial prototypes of the BeachBomb were faithful to the shape of a real VW Type 2 "bus", and had two surfboards sticking out the back window, in a nod to the VW's perceived association with the surfing community and the slang term for a person who spends much time surfing—a "beach bum".[10] During the fledgling Hot Wheels era, Mattel wanted to make sure that each of the cars could be used with any of the playsets and stunt track sets. Unfortunately, testing showed that this early version (now known among collectors as the Rear-Loader Beach Bomb, or "RLBB") was too narrow to roll effectively on Hot Wheels track or be powered by the Super Charger, and was too top-heavy to negotiate high-speed corners.

Hot Wheels designers Howard Rees and Larry Wood modified the casting, extending the side fenders to accommodate the track width, as well as providing a new place on the vehicle to store each of the plastic surfboards. The roof was also cut away and replaced by a full-length sunroof, to lower the center of gravity. Nicknamed the Side-loader by collectors, this was the production version of the Beach Bomb.

The Rear-Loader Beach Bomb is widely considered the "Holy Grail", or ultimate pinnacle, of a serious Hot Wheels collection. An unknown number were made as test subjects and given to employees. A regular production Beach Bomb may be worth up to $600, depending on condition. Market prices on RLBBs however, have easily reached the five-figure plateau, ranging from $70,000 to $120,000.[11] The Petersen Automotive Museum in Los Angeles had a pink RLBB in its Hot Wheels exhibit, displayed alone on a rotating platform under glass. The Hot Wheels Collectors Club released a new, updated version of the Rear Loading Beach Bomb in 2002 as a limited edition.

1970 was a very successful year for Hot Wheels, so Mattel came up with a new advertising slogan for the cars: "Go With the Winner".[12] 43 new cars appeared that year, including the Sizzlers and Heavyweights lines. Howard Rees, who worked with Ira Gilford, was tired of designing cars. He wanted to work on the Major Matt Mason action figure toy line-up. Rees had a good friend by the name of Larry Wood, whom he worked with at Ford designing cars. When Wood found out about Hot Wheels at a party Rees was holding, Rees offered him the job of designing Hot Wheels models. Wood accepted, and, by the end of the week, Wood was working at Mattel, where his first design was the Tri-Baby. Larry Wood retired in 2019 after over 40 years of designing cars.

Another designer, Paul Tam, joined Wood and Gilford. Tam's first design was the Whip Creamer.[13] Tam continued to work for Mattel until 1973. Among the many fantastic designs Tam thought up for Hot Wheels, some of the collector's favorites include Evil Weevil (a Volkswagen Beetle with two engines), Open Fire (an AMC Gremlin with six wheels), Six Shooter (another six-wheeled car), and the rare Double Header (co-designed with Larry Wood).

The year 1970 introduced "the Snake and the Mongoose", a manufactured 'rivalry' between two professional drag racers calling themselves "the Snake" and "the Mongoose" for the purposes of publicity. This was notably drag racing's first major non-automotive corporate sponsor, and the beginning of the NHRA's booming popularity with large-budget teams and championships. 1970 also introduced the first 'Silver Series', which contained three silver-painted models: the Boss Hoss, the HeavyChevy, and the King 'Kuda, which were only obtainable through a mail-in offer that included a membership to the Hot Wheels Club. These three cars featured "supercharged" engines (featuring large Roots blowers) without hoods, and open exhaust headers, after the style of drag racing cars of the era. Popular among children, these 'Silver Cars' were considered faster than the rest of the Hot Wheels lineup, because they were supposedly heavier than the other gravity models, but the accuracy of this claim has never been tested under scientific conditions.

However, 1972 and 1973 were slow years. Only seven new models were made in 1972. Of the 24 models appearing for 1973, only three were new models. Also the cars changed from Mattel's in-house Spectraflame colors to mostly drab, solid enamel colors, which mainstream Hot Wheels cars still use today. Due to low sales, and the fact that the majority of the castings were not re-used in later years, the 1972-3 models are known to be very collectible.

In 1974, Hot Wheels introduced its 'Flying Colors' line, and added flashy decals and "tampo-printed" paint designs which helped revitalize sales. As with the lower-friction wheels in 1968, this innovation was revolutionary in the industry, and—although far less effective in terms of sales impact than in 1968—was copied by the competition, who did not want to be outmaneuvered again by Mattel product strategists.

In 1977, the 'Redline Wheel' was phased out, with the red lines no longer being printed on the wheels. This cut costs, but also reflected that the prototypical "red line tires" popular on high-speed-rated automotive tires during the era of muscle cars and Polyglas tires were no longer popular. During this period, there was a trend away from wild hot rods and fantastic cars, and a move to more realistic cars and trucks, like the competitor Matchbox.