US Navy Shipbuilding - Up Next for Department of Governmental Efficiency?
As U.S. government spending scrutiny intensifies under the Trump Administration, the Navy’s shipbuilding budget may be up next for examination at Elon Musk’s Department of Governmental Efficiency.
On the popular “All-In” podcast, host/investor Chamath Palihapitiya recently highlighted that the Navy is slated to spend around $3 billion per vessel, raising questions around efficient taxpayer dollar use.
Benchmarking the build cost of combat vessels is challenging, given each ship’s specialized requirements. However, for non-combat support vessels, we can compare construction costs to similar commercial ships for a clearer sense of domestic shipbuilding efficiency—and whether taxpayer money is being spent effectively.
A Medium Range (MR) product tanker, for example, is a common commercial vessel of about 50,000 deadweight tons, capable of carrying roughly 300,000 barrels of refined petroleum products.
MR product tanker built in South Korea or Japan: ~$52 million
MR product tanker built in the United States: ~$225 million
U.S. Navy’s John Lewis–class oiler (roughly MR tanker sized, but also includes special equipment for ship-to-ship refueling): ~$838 million
Before accounting for specialized military features, simply building a comparable commercial vessel in the U.S. costs $173 million more than it would abroad.
The stark difference in shipbuilding costs domestically versus abroad raises important questions about our ability to compete in the international market and how best to manage the Navy’s shipbuilding budget to ensure a cost-effective use of taxpayer funds.
