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Peloton to build its first U.S. factory in Ohio

Peloton has committed around $400 million to build a factory in northern Ohio that will start producing exercise equipment in 2023.

Peloton Treadmill​
Image: Peloton

On Monday, Peloton announced that it would spend $400 million to build a 200-acre facility — dubbed Peloton Output Park — in Wood County, Ohio. The facility will manufacture the Peloton Bike, Bike+ and the Tread. It will include over one million square feet in manufacturing, office and amenities space.

Peloton currently works with manufacturing partners in Asia. In April, however, it completed the $420 million acquisition of Precor, a commercial fitness manufacturer with facilities in North Carolina and Washington. Peloton expects to use Precor facilities to begin producing its exercise machines before the end of 2021, according to CNBC.

The Ohio project is still contingent on final approval from government officials. Peloton would receive $49.4 million in tax incentives from the Ohio Tax Credit Authority, according to The Columbus Dispatch. The Peloton Output Park facility is projected to bring 2,174 jobs to Wood County, which is situated directly south of Toledo.

The investment in U.S. manufacturing facilities signals Peloton's bullish outlook for consumer demand, even as the pandemic abates and gyms reopen in the U.S. The company reported nearly $1.3 billion in total revenue for the three months ended March 31. This represented a 140% increase from a year prior. Peloton also reported that actual workouts in that same timeframe tripled, from 44.2 million in the first three months of 2020 to 149.5 million in the first three months of 2021.

Even during this impressive growth streak, Peloton has dealt with serious setbacks in manufacturing and design.

Earlier in May, Peloton recalled its entire line of treadmills. The Consumer Safety Protection Commission warned all Tread users to stop using the machines due to the associated risks; one child had already died in an accident involving the Tread and several others were injured. Peloton initially challenged the CSPC assessment, but later backtracked and called its response "a mistake." The voluntary recall applied to 125,000 treadmills, and Peloton halted sales of any new Tread devices while it addresses the safety concerns.

Consumers have also complained about wait times for equipment during the pandemic. In February 2021, for instance, customers were experiencing wait times of 10 or more weeks. The Peloton site currently lists delivery times for certain equipment as between one and three weeks.

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