Inelastic bending. Internal friction is caused by inelastic bending. When you bend a material, some of the kinetic energy is turned into other forms of energy. you create some elastic potential energy stored in the strain field of the material. However, you also create thermal internal energy stored in the entropy of the material. When the pressure is low, the tire material bends because the shape of the tire is changing. As the tire rolls, the flat part of the tire pressed against the ground moves around the rim. In order for the flat part to move around the rim, the rubber of the tire must bend. In rubber, most of the bending is inelastic. So the kinetic energy is turned to thermal internal energy. The inelastic bending is also associated with hysteresis as well as friction. The rubber becomes cracked and dry with greater use. So the rubber degrades with time of use.