Potential energy is the amount of energy a thing has because of where it is or because of its parts. Potential means something that is possible or almost there. If an object is located on a cliff or a hill, it has a lot of potential energy because it has a lot of energy to do something.
This car has lots of potential energy because it is on a high hill.
Potential energy is connected with kinetic energy. When a thing is pushed off of the hill or cliff, its energy turns into kinetic energy because it is moving.
See the girl at the letter A. She has a lot of potential energy because of where she is. She is up in the air, so she has a lot of potential energy to come down and swing. At the letter B, her potential energy turns into kinetic energy because she is moving really fast.