Peloton to Open First U.S. Factory to Build Bikes, Treadmills

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Peloton Interactive Inc. will open its first dedicated U.S. factory in 2023, with an eye to expanding production capacity, reducing shipping times, expanding to new markets and cutting prices.

The factory, dubbed Peloton Output Park, will open in Troy Township in Ohio, Chief Executive Officer John Foley said in an interview Monday. The facility will accelerate an expansion into Europe and other new markets, reduce geopolitical risk involving Asia manufacturing facilities and improve economies of scale, Foley said.

Peloton plans to spend $400 million building the facility and will create about 2,000 local jobs. The approximately 1-million-square-foot (93,000 square meters) factory will manufacture the Peloton Bike, Bike+ and cheaper treadmill, Foley said. He added that future new products could be built there as well.

Peloton to Open First U.S. Factory to Build Bikes, Treadmills

Foley said that the Ohio facility will cut production costs and eventually let Peloton lower prices. Peloton’s pricey fitness equipment starts at $1,895 for an entry-level bike, while the cheaper Tread treadmill sells for $2,495. Foley said it could take a few years before prices fall.

Over the past year, Peloton has experienced extreme supply constraints amid spiking demand for its products during the pandemic. Foley said local manufacturing will speed up shipping times. He added that the company will continue to have factories in Asia.

While the facility will mostly produce equipment for the U.S. market, it could also make products for Europe. Foley also said that Precor facilities acquired by Peloton in Washington and North Carolina will start producing smaller quantities of Peloton equipment later this year in addition to Precor’s products. But the Ohio facility will be fully dedicated to Peloton gear.

Peloton said the factory will also be open to the public and will have a showroom.

©2021 Bloomberg L.P.

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