How does a hydrodynamic retarder (e.g., Voith retarder) dissipate kinetic energy during continuous downhill descent in an Austrian Alpine pass?

1. By compressing intake air inside the engine cylinders via variable valve timing
2. By circulating oil between a rotating rotor and a stationary stator, converting kinetic energy into heat absorbed by the engine cooling circuit
3. By creating eddy currents in copper-lined steel discs cooled exclusively by ambient ram air
4. By generating electricity that is stored in auxiliary high-voltage capacitor banks