In the wake of fading consumer demand, Peloton Interactive, Inc. $PTON: $24.22(-23.93%)

has decided to halt the production of its connected fitness products as it aims to control costs, as per the internal documents obtained by CNBC.

Peloton will put a halt to its Bike production for two months, starting from February to March, reported CNBC, citing the documents received by it.

The production of its expensive Bike+ has already been suspended in December and is likely to continue until June.

The fitness company will stop manufacturing Peloton Tread treadmill machines for six weeks, beginning February. Also, it may no longer be able to produce any Tread+ machines in fiscal 2022, showed documents obtained by the business daily.

Peloton had previously stopped the production of Tread+ after a safety recall a year ago.

According to the company’s confidential presentation dated Jan. 10, the demand for its connected fitness equipment is going through “significant reduction” globally owing to customers’ price sensitivity and heightened competitor activity.

Peloton wrongly assessed its sales estimates; it failed to guess how many customers will stay after the covid-19 created demand for its products recedes. It is now at a juncture where thousands of its cycles and treadmills are sitting in warehouses or cargo ships, and the company has to restock its inventory.

Peloton’s market cap has been reduced by nearly $40 billion in the last year, prompting the planned production halt. Its market value peaked at about $50 billion in January of last year.

However, its stock nosedived to a 52-week low of $29.11 on Tuesday, nearly around the price of $29, where it priced its IPO in September 2019.

Shares of Peloton tanked as much as 27% on Thursday on the announcement of the news concerning production halt.

The company’s presentation shows Peloton had initially assessed the forecast on Oct. 31 for demand and deliveries in its fiscal third quarter and fourth quarter that turned out to be too high. Then it reevaluated its projections on Dec. 14, and as per the latest expectations Peloton now sees a significant drop in demand for its Bike, Bike+ and Tread.

However, Peloton said, the revised estimates do not consider the possible impact on demand once it starts charging an additional $250 over retail price for in-home delivery and setup fees of its Bike, and another $350 for its Tread, beginning January 31, 2022.

The revised delivery and setup charges come amidst the financial headwind the company is facing, although the company stated inflation and supply chain disruption as the reason behind the move.

In the internal documents viewed by CNBC, Peloton has mentioned the low email capture rates that it has recorded for the upcoming debut of its $495 strength training product, Peloton Guide, having codename “Project Tiger”.

Email capture rates keep track of how many email subscribers Peloton is getting on its website to receive information on the product.

The company said it indicates“a more challenging post-Covid demand environment.”

The official launch of Guide in the U.S. was postponed from last October to next month, and now it can come as late as April, the presentation dated earlier this month said.

The company will report its fiscal second-quarter results on Feb. 8.

At the time of Q1FY22 earnings results, Chief Executive Officer John Foley said in a letter to shareholders had said, “We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures,”

Peloton, in its first quarterly report of the fiscal, trimmed its annual revenue forecast by almost $1 billion and also expected a reduction in its subscribers and sales, “highlighting its obstacles to adjust with the post-pandemic economy,” as reported earlier.

The supply-chain constraints combined with rising costs of commodities and freight continue to impact the company’s bottom line.