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Peloton to Stop Producing Its Own Bikes, Increase Third-Party Production

It's the latest in a series of moves by the company amid declining sales.

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Tyler Lizenby/CNET

Peloton said Tuesday that it'll stop making bikes in-house, opting to expand operations with a third-party manufacturer as it looks to cut costs amid declining sales.

In a release, the maker of exercise equipment characterized the move as a "natural progression" in its efforts to simplify its supply chain.

Peloton said Taiwanese manufacturer Rexon would become the primary producer of Peloton bikes, and that Peloton would suspend operations at its in-house facility through the remainder of 2022.

Andy Rendich, Peloton's chief supply chain officer, said Rexon is a trusted third-party manufacturer.

"Rexon has been with Peloton for many years and is a proven partner for our global operations," Rendich said. "We plan to maintain a significant corporate and manufacturing presence in Taiwan with over 100 Peloton Taiwan team members who continue to play a key role in our engineering and manufacturing strategy."

Peloton's decision to further outsource manufacturing is likely aimed at reducing expenses as sales decrease, following a boom in business during the early part of the pandemic. In February, Peloton cut around 2,800 jobs globally, in an attempt at "right-sizing" changing production demands. In April, the company cut the price of Peloton bikes but increased the cost of subscriptions to its online library of fitness content.