Even though this isn’t strictly an aviation question, it does involve aerodynamic principles.
To put it simply, the diffuser’s main purpose is to gradualize the transition from rapidly flowing air under the car’s body as it transitions back to the speed of the ambient air behind the car.
There is a high pressure zone in front of the car from air particles colliding with the vehicle, and a low pressure zone in the wake behind the car as airflow is attempting to rejoin on the other side. This high to low flow draws air under the car where space is limited. This limited space results in an increase in speed and a decrease pressure, thus increasing downforce as the pressure below the car is less than the pressure on the top and sides of the car. This is Bernoulli’s equation at work.
However, the rapidly moving air experiences adverse pressure gradient at the rear of the car and airflow separation results in significant turbulence. This turbulence not only increases drag, but limits how quickly air can be evacuated from underneath the car. By carefully shaping a diffuser, the airflow can be slowed more gradually, easing its transition back into the ambient flow, minimizing turbulence which increases the flow speed under the car, decreasing the pressure and increasing downforce on the wheels even further.
The diffuser is shaped to increase the airflow speed in front of this funnel to ‘push’ a low pressure zone in front of the funnel, more effectively drawing air into the diffuser.