KTM’s struggle to survive is very much bleeding into its racing

KTM has long been one of the title contenders for the MotoGP championship, as the Mattighofen squad lives and breathes racing. The company’s motto, after all, is ‘Ready to Race.’ 

It spent millions of dollars on research and development of its MotoGP entry, and lured names to its doors such as Brad Binder, Maverick Viñales, Enea Bastianini, and incoming phenom Pedro Acosta. On paper, it has the potential to fight with championship-dominating Ducati. But like many things that KTM has on paper, it’s only worth what’s behind it. And right now, there’s not a lot supporting the orange-bleeding team as the company is an absolute mess. 

But what’s the latest on KTM, and how will its new plights affect its MotoGP team?

Late last year, after little to no warning, KTM declared that it was nearing insolvency. For those who don’t speak economics, the company was hemorrhaging money after foolhardy acquisitions, it couldn’t pay salaries, there was more than a year’s worth of motorcycles sitting idle on dealership lots, and it owed a lot of money to its creditors and suppliers.

In an effort to save the company, it voluntarily put itself into administrative restructuring within the Austrian courts. There, with the say of the brand’s board, as well as its shareholders, they’d decided the fate of the company and what had to occur for its continued existence.  

It was around then that KTM began laying workers off, it began selling off assets, cleaned house on the board of directors, and sold its recently acquired stake of MV Agusta back to MV Agusta after just nine months. It also not only shuttered its prized Mattighofen production facility, but because its MotoGP program worked out of the facility, it paused development of its 2025 race bike, too. 

At the time, Red Bull KTM’s MotoGP team principal Pit Beirer spoke about how everything was actually fine, and how there were contingencies built into the team so that it could continue racing. He assured the press and fans alike that the team was going to be OK. But rumors began swirling that Acosta was unhappy with the team, its development pause, and the state of the company’s issues. It boiled over to the point where Beirer invited Acosta and his manager to Mattighofen to view the bike’s status. 

Acosta’s manager, Albert Valera, told Motorsport.com, “Pedro and I had the opportunity to travel to Austria to see in person the real situation of the KTM project in MotoGP. Despite the delicate situation that the company is going through, the feeling is positive. We have been told at all times that racing is the essence of KTM, that they will continue working with the sole objective of winning the title. Pedro is committed to the project and feels more relieved and confident after the meeting.”

However, rumors didn’t abate. Least of which was due to Valera fueling fires that his charge was unhappy and looking for the best way to find himself on the championship podium. 

And then, after other rumors pointed toward the team leaving the sport altogether, Beirer once again denied everything. AKV, however, the group managing the company’s insolvency proceedings, stated unequivocally that it would be leaving the sport in 2026, stating “In this regard, it is planned not to extend the contract with MotoGP, which runs until 2026. An early withdrawal from the racing series is not currently planned. The reason for this is the reduction in costs for KTM AG and its subsidiaries.”

Beirer once again went on the defensive, telling Speedweek, “We took measures a long time ago. Some drastic reductions have been made, which now help us in the overall account. This goes as far as little things that single rooms become double rooms. If you go through all the little things, you get a big sum at the end of the day.” It was here when rumors began of the team being sold. One interested party was none other than Ferrari’s Lewis Hamilton, a massive MotoGP fan himself. 

Development of the 2025 entry did finally occur. As did the supposed saving of the company thanks to a lifeline from Bajaj, the Indian motorcycle giant which already had a sizable stake in the company. Its CEO, Stefan Pierer, stepped down and installed a new person to run the company. Everyone, at the time, rejoiced as it seemed like the Austrian outfit was going to be OK. 

Maverick Vinales, Red Bull KTM Tech 3

Photo by: Gold and Goose / Motorsport Images

Yet, its MotoGP squad has continued to suffer. Based on Acosta and Binder’s results, as well as KTM Tech3 teammate Vinales switching to last year’s bike, with Acosta later following suit, the year hasn’t been going KTM’s way. In fact, the four-person squad has complained about this year’s model at nearly every racetrack, as a vibration issue has yet to be resolved. Acosta told The Race, “I don’t understand. Different settings, four different bikes at the end of the day. I cannot say where it’s [vibration] coming from.” As such, rumors of Acosta leaving haven’t died down. 

Beirer’s most recent comments on an Acosta early departure, as told to MotoGP’s own news outlet, state, “I think I take it as a compliment and if all these superstars find out now that Pedro is a good rider, we found out many, many years ago. And that’s why we supported him already since he was in the Rookies Cup. So, he’s under contract with us and also there I feel OK and I take it as a compliment.” But “He’s under contract” is different from “He’s happy to be here and isn’t looking.” In fact, it feels far more defensive. 

And KTM is once again back in the news in ways that could further deconstruct its MotoGP team. 

In the last week, the group announced that the deal it struck with its investors, creditors, board, and the restructuring group to survive, where it’d have to pay its creditors around 600 million euros, was no longer feasible. It didn’t have the cash to do so by the May deadline it had agreed to. Once again, it would have to seek partners and find a cool half-billion to ensure its survival. Likewise, it would once again pause production at its Mattighofen facility only a few weeks after resuming production in late March. 

Again, KTM’s MotoGP HQ is located at that facility.

So, where does that leave the outfit going into race weekend at Circuito de Jerez in Spain? That’s unclear, though I suspect Beirer will have a handful of questions posed to him asking how KTM hopes to continue racing when everyone at the facility has been put on leave, and the company itself is dangling by a very thin, very frayed strand.