The speedometer is driven by the output of the transmission shaft. Old vehicles used to have gear driven speedometers and the needle used to go negative when driving in reverse. Nowdays, the sensor is electronic and runs into a engine computer which displays the speed properly if you are going forwards or backwards.
The speedometer is calibrated at the factory for the tire and rim size listed on the placard on the door frame. If you add things like 36″ off road tires to a truck, the speedometer will no longer display the correct speed. In the past with mechanical speedometer cables you would change a gear in the dash to correct the speed, but modern engine computers have a setting in the programming to correct the inaccurate display.
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