Born in Roskilde, Magnussen won the 1992 Formula Ford Festival at Brands Hatch, then dominated the 1994 British Formula 3 championship with Paul Stewart Racing, winning fourteen of the eighteen events and breaking Ayrton Senna's F3 record. He scored his first British F3 win that April at Donington Park, also taking pole for the race. He won at Brands Hatch, twice at Silverstone, and at Thruxton, taking six of the first eight races. He then won again at Donington Park and both season-ending rounds at Silverstone.
Magnussen made his Formula One debut at the 1995 Pacific Grand Prix in Aida, substituting for an unwell Mika Häkkinen, becoming the first Danish driver to race in the category since Tom Belsø in 1974. In 1996, he competed in the CART series and the International Touring Car Championship.
For 1997 and 1998, Magnussen had a seat with the newly founded Stewart Grand Prix team, owned in part by his former F3 boss Paul Stewart. Team founder Jackie Stewart once described him as "the most talented young driver to emerge since Ayrton Senna," but his performance was underwhelming. He scored his only championship point in his last F1 race, the 1998 Canadian Grand Prix; for the rest of the season he was replaced by Jos Verstappen. Magnussen started 24 Grands Prix, one less than he entered, because his car was damaged in an accident during the start of the 1997 Brazilian Grand Prix, causing him to retire before the restart.
In 1999, Magnussen participated in seven CART races. In 1999 and 2000, he raced in the American Le Mans Series with Panoz. In 2001, he drove a Peugeot in the Danish Touring Car series (DTC) and raced in eight ALMS races; in 2002 he again raced for Peugeot in DTC and ten ALMS races.
Magnussen has participated in the 24 Hours of Le Mans every year since 1999. His victories came in the GTS class in 2004 and the GT1 class in 2005, 2006, and 2009, each time in a Chevrolet Corvette. His teammates were Oliver Gavin and Olivier Beretta in 2005 and 2006, and Johnny O'Connell and Antonio García in 2009.
He has competed in the 12 Hours of Sebring every year since 1999, winning the GT1 class in 2006, 2008, and 2009. Magnussen won the 2008 GT1 and 2013 GT drivers championships, both with Corvette Racing. He also won the DTC in 2003 and 2008. In 2005, he drove a Toyota Corolla in the Danish Touring Car Championship.
Magnussen competed in the Danish Touring Car Championship until 2010, driving a Chevrolet Lacetti for Perfection Racing, and in a Chevrolet Corvette C7.R in the WeatherTech SportsCar Championship with Antonio García as teammate until 2019, alongside continued Le Mans appearances.
On 11 June 2010, it was announced that Magnussen would make his NASCAR Sprint Cup Series debut driving the No. 09 HendrickCars.com Chevrolet for Phoenix Racing at Infineon Raceway. He started 32nd and finished twelfth. He also drove the No. 57 Stevenson Motorsports Chevrolet Camaro with Robin Liddell and Andrew Davis in the 2010 GRAND-AM Rolex Sports Car Series Rolex 24 at Daytona, subsequently moving to the team's No. 97 car for most of the season with Gunter Schaldach.
On 7 November 2019, Magnussen was confirmed to drive in the inaugural TCR Denmark Touring Car Series for LM Racing in a VW Golf GTI TCR. On 22 July 2023, he won the Aurum 1006 km endurance race in Lithuania driving a Mercedes-Benz AMG GT3 Evo. On 16 September 2024, it was announced that Magnussen would take part in the Walter Hayes Trophy at Silverstone in November, driving a GT Motorsport-prepared Van Diemen RF78 in the Duckhams colours that adorned his car at the 1992 Formula Ford Festival.
Magnussen's oldest son, Kevin Magnussen, is also a racing driver competing in the FIA World Endurance Championship and IMSA WeatherTech SportsCar Championship with BMW, having previously competed in Formula One with Haas, McLaren, and Renault; Kevin has said his father was his first hero. Magnussen's nephew Dennis Lind and youngest son Luca are also racing drivers.
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