US Submarine Production Challenges Could Impact Australia’s Defense Plans Under Aukus Agreement

Admiral Daryl Caudle, who is slated to become the US Navy's chief of operations, recently informed Congress that the United States cannot sell any Virginia-class nuclear submarines to Australia unless it significantly increases its submarine production. During a testimony before the Senate Committee on Armed Services, he noted that the current US production of submarines is insufficient for its own defense requirements, falling short of its target numbers by about 25%.

Caudle elaborated that the navy is currently constructing submarines at a rate of approximately 1.13 per year, while it requires a production rate of 2.00 to fulfill its defense obligations and around 2.33 to supply submarines to Australia, as agreed in the Aukus pact. He emphasized that improvements in production efficiency alone will not suffice; instead, a transformational leap in production—a 100% increase—is necessary to uphold the commitments made under the Aukus agreement.

Under the terms of the Aukus agreement, Australia is set to purchase between three to five Virginia-class submarines beginning in 2032. However, the US Navy’s shipbuilding capabilities have not seen the anticipated uptick in production, despite having received additional funding from Congress aimed at enhancing workforce wages and productivity. Caudle pointed out the need for creative approaches and potential outsourcing to meet the production demands effectively.

Former Australian Prime Minister Malcolm Turnbull expressed concerns that there may be a high likelihood that the Virginia-class submarines will not be delivered to Australia. He urged the current government to acknowledge this reality and to formulate a contingency plan for alternative capabilities, given the nearing retirement of Australia’s Collins-class submarines and delays in the development of new submarines under the Aukus framework.

Defense Minister Richard Marles, addressing the situation, stated that Australia is actively working with the US to secure a pathway to nuclear-powered submarine capabilities. He reaffirmed Australia’s financial contributions to bolster the US shipbuilding industry and mentioned that Australian technicians are already involved in maintaining US submarines in Pearl Harbor.