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Peloton Announces New $400 Million U.S. Factory

By Howard Smith - May 24, 2021 at 1:14PM

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The Ohio facility will be its first dedicated domestic manufacturing plant.

Peloton Interactive (PTON 1.02%) announced today that it will build a new manufacturing facility in Troy Township, Ohio. The $400 million investment will be the company's first dedicated domestic site, and is intended to continue to help resolve long delivery delay times. 

Peloton completed its acquisition of Precor earlier this year, which brought it into the market for commercial fitness equipment customers and gave it access to two U.S. manufacturing plants. In the company's fiscal second-quarter 2021 financial release, Peloton said, "we will be incrementally investing over $100 million in air freight and expedited ocean freight over the next six months in order to improve our order-to-delivery windows." Today's announcement is the latest step toward that goal. 

Woman on home exercise bike.

Image source: Getty Images.

Peloton continues to ramp up production at a new production facility in Taiwan, and said today that it will continue to invest in its Asian manufacturing footprint. But even with that new plant, the company said in its fiscal third-quarter update in May that "well-publicized West Coast port delays and COVID-related factors continue to present challenges to returning our delivery times to pre-pandemic levels."

Peloton said the investment in the U.S. plant will shift a large portion of its manufacturing to the U.S., and create "a massive strategic lever to make sure we have capacity, quality, and economies of scale in our bike and tread product lines." The company added that it will also add investment to its Precor U.S. sites as it plans to support years of future growth. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Peloton Interactive. The Motley Fool has a disclosure policy.

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