The US Navy has conceded that it will not achieve a production rate of two Virginia-class attack submarines per year until 2032, a timeline that remains insufficient to meet the requirements of the Aukus agreement with Australia. This admission represents the clearest indication yet that the promised transfer of nuclear-powered submarines to Australia may not materialise as planned.
Soaring Costs and Persistent Delays
Australia's latest budget, released on Tuesday, allocated an additional $400 million to the Aukus submarine program over the next three years, bringing the total resourcing of the Australian Submarine Agency to $2.13 billion through mid-2029. Furthermore, Canberra has transferred A$2.76 billion (US$2 billion) to the United States and A$863 million (£469 million) to the United Kingdom to bolster their struggling submarine industrial bases.
These sums, however, represent only a fraction of the overall projected expenditure. By 2055, the Aukus deal is conservatively estimated to cost Australia A$368 billion.
US Production Capacity Falls Short
The US Congress and Navy, upon which Australia depends for its first nuclear-powered submarines—two second-hand Virginia-class vessels—continue to signal that domestic production is insufficient to meet America's own needs, let alone provide submarines for export to Australia.
Submarine construction in the US has decelerated markedly over the decades. It currently takes American shipbuilders ten years to complete an attack submarine, compared to six years two decades ago. Over the past 15 years, the US Navy has ordered Virginia-class submarines at a rate of two per year, but shipyards have never met that build rate. Since 2022, production has been limited to approximately 1.1 to 1.2 boats per year, resulting in a growing backlog of ordered but unfinished vessels, according to the Congressional Research Service.
Consequently, the US Navy possesses only 49 of the 66 submarines it requires to meet its force-level goals. To satisfy its own demands, shipyards must achieve a production rate of two Virginia-class boats per year. To supply submarines to Australia, that rate must increase to 2.33 boats annually.
Revised Timelines and Persistent Doubts
The US Navy initially forecast reaching the two-per-year build rate by 2026. That target was subsequently pushed back to 2028, and now further to 2032. Admiral Daryl Caudle, Chief of Naval Operations, testified before the House Appropriations Committee Defense Subcommittee: “I would say we’re going to be up on step with that [production rate] around 2032 based on the things we’ve done … we should be up to two-per-year in the early 2030s.”
Even if this revised timeline is met, the production rate would still fall short of the 2.33 boats per year required to contribute to Aukus and sell even one submarine to Australia. US legislation governing Aukus stipulates that a submarine can only be transferred to Australia if losing it “will not degrade the United States undersea capabilities.”
Structural Challenges in US Shipbuilding
The US Navy’s 30-year shipbuilding plan, released this month, does not account for constructing any additional submarines for Aukus. The document mentions Aukus only once, in a footnote, stating it has been excluded from the Navy’s projections.
A report issued last month, Challenges Facing the Navy’s and Coast Guard’s Shipbuilding Programs and the Shipbuilding Industrial Base, paints a dire picture of an industry that consistently fails to meet targets. It notes that “the Navy and the shipbuilding industrial base have had the resources, but have been unable to deliver the ships that the service has ordered in a timely manner.” Workforce challenges are identified as the primary constraint, with nearly all major shipyards struggling to hire and retain workers as a generation of experienced employees retires. Additionally, up to 70% of parts suppliers have no competitors, meaning a single supplier’s difficulties could disrupt construction.
Alternative Scenarios and Australian Perspectives
The US Congressional Research Service has openly considered “alternative divisions of labour” under which no Virginia-class submarines are ever transferred to Australian control. Its latest report on Aukus, issued in January, examines a revision where submarines earmarked for sale to Australia are instead retained under US command and operated out of Australian bases. The report argues that in a conflict or crisis with China over Taiwan, submarines under US command could be immediately deployed, whereas those under Australian command could not be ordered into operation.
Acting Secretary of the Navy Hung Cao, appearing before the same House subcommittee, suggested that the submarines’ command structure is essentially interchangeable: “The enemy will not know if it’s an American submarine out there or an Australian submarine because it’s going to all be the same … let them guess what’s out there.”
Despite these reassurances, the persistent delays and production shortfalls raise serious questions about whether Australia’s nuclear submarine ambitions will ever be realised as originally envisioned.
