In the midst of a significant financial crisis facing the Austrian manufacturer, KTM's MotoGP bosses have taken a crucial decision. Motorsport.com has uncovered that the development of KTM's bikes has been paused. This move is part of a comprehensive plan aimed at safeguarding the company's sporting project after it filed for insolvency last week. The debt burden of around 3 billion euros is much larger than previously believed.

Reassuring the Sporting Project

During the last race of the season in Barcelona, MotoGP officials held a meeting at KTM's workshop. They informed everyone present about the company's delicate financial situation. However, they also assured the staff that the sporting project would continue in the world championship. Cost containment measures have been in place for some time, and the pause in bike development for next year's riders was also discussed. Pedro Acosta and Brad Binder in the factory team, along with Maverick Vinales and Enea Bastianini in the Tech 3 squad, will face this setback.

Winter Pause and Pre-Season Tests

The development of the bikes will be initially paused during the winter and until the pre-season tests in February at Sepang. During the recent post-season test in Barcelona, only a new fairing and a couple of new screens were added to the RC16 bike. Dani Pedrosa, who renewed as a test rider a few weeks ago, and Pol Espargaro did not participate in the testing. Although KTM has assured its teams about being on the 2025 grid with all four bikes, there are doubts in MotoGP promoter Dorna's headquarters.

Major Restructuring and Strategic Plan

In recent months, KTM has undergone a major restructuring. Several branches like KTM AG, KTM Components GmbH, and KTM F&E have been split off. The racing division is now under KTM Racing GmbH. Initially, this seemed to secure the racing division, but the size of the financial hole is much larger than estimated. Alongside the freeze on MotoGP bike development, KTM is expected to present a strategic plan in the coming days to isolate the sporting division. It is considered essential for the racing arm to remain active to minimize the damage to the company's image and sales.

Early Rumors and Acosta's Assurance

During the second half of 2024, rumors about KTM's financial health started to emerge, especially after overproduction, a drop in sales, and a failed electric bike project. In September after the Misano test, Pedro Acosta said that he was assured by the factory that the sporting programme would be fully supported. But since then, bad news has been piling up, and the hardest blow came last week with the start of the insolvency process and the huge debt.