Why Peloton Is Taking a Little Break From Making Bikes

A year ago, a pause in production would've been unthinkable. But 2021 hit hard.

A close-up photo of the Peloton Bike. Peloton is ramping down production on several products due to a decrease in demand.
Peloton won't make another one of these until the spring.
Joe Raedle/Getty Images

In case you somehow missed it, Peloton had a typical Peloton controversy last month.

A character on the Sex and the City reboot (And Just Like That…) died while riding one, so people started freaking out on Twitter that their bikes were unsafe. The company’s shares cratered in real life in a 24-hour span, until Ryan Reynolds swooped in to save the day with a cheeky commercial that starred the character who’d died on the Peloton. That seemed to be the end of that. Then the actor who plays that character (Chris Noth) was accused of sexual assault by multiple women.

It was a top-to-bottom PR nightmare, but believe it or not, that was far from the worst thing that happened to the once-mighty platform last year. Peloton stormed into 2021 with record holiday sales, the clear leader in the connected fitness movement, and eager to maintain the workout-from-home throne. But midway through the year, people sort of … stopped caring.

At the brand’s peak of popularity — which we could reasonably pinpoint to about 14 months ago — the bike was nearly impossible to get. Units ordered that fall were backordered into spring of 2021. I can remember talking to friends around Black Friday of 2020 about the craze. One managed to get his bike an earlier delivery after an hour on the phone with customer service.

But by last summer, as vaccinations and warm weather started pushing the pandemic to the brink, and conventional gyms started looking like themselves again, Peloton bikes began to feel like an unnecessary luxury — and an expensive one at that, with a monthly charge of $39.99 to access its app and services, atop the near-$2,000 base cost.

Some who owned Peloton bikes, eager to remove the albatross of automatic payments, started looking around for a way to sell their bikes at a loss. Resale marketplace OfferUp reported a 77% increase in Peloton sellers since April. Another site, Mercari, saw a preposterous 1,336% year-over-year surge in the sale of Peloton’s exercise bikes and branded cycling shoes.

That made the bikes available at a discount for parties that were still interested. And considering our increasing comfort with “lightly used” tech (after all, if someone’s selling it they probably didn’t get too many rides in), it makes sense that more industrious customers would look to save a couple bucks.

This has hurt Peloton in two ways. One, they’re not making as much money as they’d like. Two, they’ve built way too many bikes (and treadmills) in a perhaps-delusional estimation that home workouts would always be as compulsory and desirable as they would in the heart of last winter, during the worst of the pandemic.

Yesterday, Peloton officially announced it will be pausing production of its most surefire sale (the Bike) for the next two months. The Bike+ has been out of production since December. Its Tread will be out of production in six weeks, and the company will not manufacture a single Tread+ in 2022. (The Tread had its own messy 2021, with dozens of injuries involving young children.)

For now, Peloton shares take another dramatic hit (they were down 24% at closing yesterday), and hopes that a couple months of bought time will be enough to clear out factory shelves. If nothing else, the platform seems to be entering 2022 with a clear perspective. In an in-house presentation, the company acknowledged that the demand for connected fitness equipment has seen a “significant reduction” across the world.

Stay tuned to see if Peloton can turn things around this year. One move that could anger prospective customers? A plan to jack up delivery and setup fees.

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