Peloton stops making its own connected bikes, treadmills

Peloton will stop making its own connected bicycles and treadmills, instead outsourcing production to Taiwanese company Rexon Industrial Corp.

Tech-powered fitness giant, hit financially after boom during the peak of the COVID-19 pandemicsaid the move will allow them to simplify supply chain operations and focus on the technology and its content.

Additionally, Peloton will be suspending operations at Taiwan-based Tonic Fitness Technology, the manufacturing facility it purchased in October 2019 for about $47.4 millionto the end of the year.

“Today, we take another important step in simplifying our supply chain and changing our cost structure – a priority for us. We believe this, along with our initiatives. other, will allow us to further reduce the cash burden on our business and increase our flexibility,” Peloton CEO Barry McCarthy said in a statement.

“Partnering with market-leading third-party providers, Peloton will be able to focus on what we do best – using technology and content to help our 7 million members become the best of themselves.”


Peloton is in the process of restructuring a larger company. In January, former CEO John Foley release a public letter said that Peloton was producing “just the right size” in response to CNBC reports that the company was halting bike production as demand faltered.

Later that month, an active investor urges the connected fitness giant to fire Foley and sell Peloton while swirling rumors about a potential deal. In early February, Foley was replaced, and Peloton has cut 2,800 jobs, or about 20% of the company’s workforce. It also decided to stop developing the Peloton Output Park manufacturing plant and reduce the company’s warehousing and delivery operations.

In May, Peloton reported $964.3 million total revenue for the third quarter ended March 31, down 24% year-over-year. The company posted a net loss of $757.1 million, compared with a loss of $8.6 million in the same period a year earlier. Adjusted EBITDA was a loss of $194 million.

In a letter to shareholders, McCarthy said Peloton is shifting its focus from hardware to software. It also slashed prices on its hardware starting April, with the goal of boosting sales, while raising prices for its All-Access subscription service starting in June.


“We are delighted to expand our partnership with Rexon, Taiwan’s leading manufacturer with over 50 years of experience. Rexon has worked with Peloton for many years and is a proven partner for the We plan to maintain an important manufacturing and company presence in Taiwan with over 100 Taiwan Peloton team members who continue to play a key role in the strategy. our manufacturing and engineering,” Peloton Supply Chain Manager Andy Rendich said in a statement.

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