What does the kart icon mean in Super Mario Kart?
Solution 1:
The karts are extra lives.
In order to advance in the Grand Prix, you must place in the top 4. If you don't, you'll have to race again and you lose a kart (life). You will also lose a kart if you forfeit the race. If you lose all your karts, then it's game over and you must start all over.
According to a GameFAQs guide by wayalla, you can gain an extra life in Grand Prix by coming in first place 3 times in a row.