Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Nuclear Powered Naval Vessels Market size was valued at USD 32.9 billion in 2024 and is estimated to reach USD 92.8 billion by the end of 2037, expanding at a CAGR of 8.3% during the forecast period, i.e., 2025-2037. In 2025, the industry size of nuclear powered naval vessels is assessed at USD 35.6 billion.
A key factor propelling the growth of the nuclear powered naval vessels market is the increasing defense budget. Countries are allocating larger defense budgets to modernize their naval fleet, which includes investment in nuclear-powered submarines and aircraft carriers. For instance, in 2022–23, the Indian Navy has been allocated a share of USD 6 billion as a capital outlay in comparison to USD 4 billion in the 2021 budget. This increase in spending is a major factor for growth of nuclear powered naval vessels.
Several countries such as India, China, and Brazil are significantly increasing their defense budgets to modernize their naval fleets, with substantial investments in nuclear powered submarines and carriers. For instance, according to a US Defense Department report released in 2021, China has the biggest navy in the world with 355 vessels. The current 355 vessels include major surface combatants, submarines, aircraft carriers, ocean-going amphibious ships, mine warfare ships, and fleet auxiliaries.
Nuclear Powered Naval Vessels Market: Growth Drivers and Challenges
Growth Drivers
- Technological advancements in nuclear propulsion: Innovations in reactor design such as smaller more efficient reactors have proven to improve the safety, performance, and cost efficiency of nuclear-powered vessels. For instance, according to the World Nuclear Association Report 2023, over 160 ships are powered by more than 200 small nuclear reactors. Thus, the focus is now on developing modular and small nuclear reactors for easy integration and lower production costs.
- Operational advantages of nuclear-powered vessels: Nuclear-powered vessels can operate for months without refueling, making them ideal for long term missions. Nuclear propulsion provides consistent power, enabling high-speed operations and greater tactical flexibility. Submarines powered by nuclear reactors can stay submerged for extended periods, enhancing stealth and survivability. For instance, according to a report by Ministry of Foreign Affairs of Japan (MOFA), the United States Navy operates the largest fleet of nuclear submarines, the U.S. has 83 nuclear powered ships which include 72 submarines, 10 aircraft carriers, and one research vessel. These NPWs make up about forty percent of major U.S. naval combatants, and they visit over 150 ports in over 50 countries, including approximately 70 ports in the U.S. and three in Japan.
Challenges
- High maintenance and operational costs: The design, construction, and commissioning of nuclear-powered naval vessels are extremely expensive due to the complexity of nuclear propulsion systems. Additionally, investments in advanced technologies, and specialized materials for stringent safety requirements increase upfront costs. Further, maintaining nuclear reactors requires specialized expertise and infrastructure making long-term operational costs higher.
- Strict regulatory and safety requirements: International and national regulations for nuclear-powered vessels are stringent to ensure safety and prevent accidents. Compliance with nuclear nonproliferation treaties and maritime safety protocols can be complex. The disposal of nuclear and radioactive waste is also a major challenge as it requires proper long-term storage solutions to prevent environmental contamination which are expensive.
Nuclear Powered Naval Vessels Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
8.3% |
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Base Year Market Size (2024) |
USD 32.9 billion |
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Forecast Year Market Size (2037) |
USD 92.8 billion |
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Regional Scope |
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Nuclear Powered Naval Vessels Segmentation
Product (Surface Vessels and Submerged Vessels)
Surface vessels segment is poised to account for nuclear powered naval vessels market share of more than 65.2% by the end of 2037. The growth can be attributed to the rising need for long-time maritime operations and higher power projection due to geopolitical tensions around the globe. Several countries are majorly focusing on developing surface vessels crucial for sustained maritime operations and power projection. For instance, in December 2024, the U.S. Navy successfully conducted the test run of its newly developed Unmanned Surface Vessel (USV) completing a continuous 720-hour power demonstration on an engine system for use in future USVs. This demonstration was part of a larger USV testing effort to assess the capability and resilience of engine systems to operate autonomously for extended periods. This milestone marked an important advancement in the U.S. naval strategy as it enhanced unmanned operation capabilities in the global space.
Application (Defense and Transportation)
The defense segment in nuclear powered naval vessels market is projected to register rapid revenue growth during the forecast period as nuclear-powered naval vessels are used for a wide range of defense applications. Nuclear powered naval vessels play a crucial role in modern defense strategies, offering unparalleled endurance, speed and stealth capabilities. These vessels are primarily used for strategic deterrence, attack operations, intelligence gathering and power projection. Ballistic missile submarines (SSBNs) serve as key components of nuclear deterrence, carrying submarine launched ballistic missiles (SLBMs) to ensure second strike capability.
Nations such as U.S., Russia, China, UK, France and India rely on these vessels to maintain naval dominance and secure their maritime interests. According to a 2022 Pentagon report, China had a fleet of six nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines, and 48 diesel-powered attack submarines. Further, the U.S. Defense Department predicts that this naval fleet will grow to 65 submarines by 2025 and 80 submarines by 2035. Thus, with technological advancements and geopolitical tensions driving expansion, nuclear powered naval vessels continue to shape the future of naval warfare.
Our in-depth analysis of the global nuclear powered naval vessels market includes the following segments:
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Product |
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Application |
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Customize this ReportNuclear Powered Naval Vessels Industry - Regional Scope
Asia Pacific Market Forecast
Asia Pacific in nuclear powered naval vessels market is estimated to account for more than 42.2% revenue share by the end of 2037, owing to rising geopolitical tensions and military modernization efforts. Countries such as China and India are expanding their nuclear submarine fleets to enhance deterrence and naval power projection. Moreover, geopolitical tensions in the South China sea and Indo Pacific are also driving investments in nuclear naval capabilities.
China’s nuclear powered naval vessels market is expanding rapidly due to its focus on military modernization and maritime dominance. The U.S. Naval Institute claims that China has approximately 370 surface ships and submarines which makes China stand out as the largest navy in the world. China’s navy includes a battle force of over 370 platforms consisting major surface combatants, submarines, ocean-going amphibious ships, mine warfare ships, aircraft carriers, and fleet auxiliaries. The country is investing in advanced nuclear submarines, including Type 095 SSN and Type 096 SSBN, to enhance underwater stealth and deterrence. The World Nuclear Association predicts that China is expected to have the greatest growth in nuclear generation.
Moreover, China’s growing marine defense budget supports the development of aircraft carriers and nuclear propulsion for extended-range operations. For instance, In March 2024, China announced a yearly defense budget of USD 231.3 billion, marking a nominal 7.2% increase from the 2023 budget of USD 224.8 billion. These investments strengthen its presence in the South China sea and Indo Pacific, challenging regional rivals.
The nuclear powered naval vessels market in India is rising due to its effort to strengthen maritime defense and strategic deterrence. It operates Arihant class nuclear submarines and Arighat along with future SSBN’s for second strike capability. With rising investments in nuclear propulsion, India is also working on indigenous SSNs to enhance underwater warfare capabilities. These advancements align with its goal of countering regional threats and securing the Indo-Pacific. The second Arihant Class submarine INS Arighat was commissioned to the Indian Navy on August 2024.
North America Market Analysis
The nuclear powered naval vessels market in North America is expected to register significant growth opportunities in the market by the end of 2037. The market is driven by its large defense budget and focus on modernizing its naval fleet. The U.S. Navy’s investments in nuclear powered submarines and aircraft carriers ensure a strong nuclear powered naval vessels market presence. Advanced reactor technologies and long operational endurance enhance their strategic value. Further, geopolitical tensions and global power projection support market growth in the region.
The U.S. leads the nuclear powered naval vessels market, focusing on maintaining its naval dominance and strategic partnerships. Investments in advanced submarine programs like the Columbia and Virginia class highlight the commitment to modernization. The Navy plans to invest almost USD 130 billion to research, develop, and purchase 12 Columbia class submarines to replace the current fleet of 14 Ohio class ballistic missile submarines, the sea-based leg of the nation's strategic nuclear deterrence. The reliance on nuclear propulsion ensures longer endurance levels and reduced logistical challenges. Rising geopolitical tensions and defense initiatives further drive nuclear powered naval vessels market growth. The U.S. Navy’s dominance of the world’s oceans has made it an indispensable foreign policy tool and a guarantor of global trade.
Canada’s interest in nuclear powered naval vessels is growing due to the importance of Arctic sovereignty mission and the need for extended operational capabilities in harsh ice-covered regions. This major need is driving interest in advanced propulsion technologies. For instance, Canada’s recent announcement to acquire 12 conventionally powered under ice submarines for the Royal Canadian Navy highlights its commitment to enhancing Arctic defense and sovereignty. These submarines are designed to operate effectively in Arctic conditions and monitor and protect Canada’s vast maritime regions.
Companies Dominating the Nuclear-Powered Naval Vessels Market
- Babcock International Group Plc
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- BAE Systems Plc
- Bechtel Corp.
- BWX Technologies Inc.
- Curtiss Wright Corp.
- General Dynamics Corp.
- Huntington Ingalls Industries Inc.
- Kongsberg Gruppen ASA
- Lockheed Martin Corp.
- Naval Group
- Northrop Grumman Corp.
- Rolls Royce Holdings Plc
- Thales Group
The nuclear powered naval vessels market is dominated by several leading defense companies. These companies have gained recognition for their technological expertise in advanced shipbuilding and nuclear propulsion technologies. General Dynamics Electric Boat and Huntington Ingalls Industries lead in the U.S., producing nuclear submarines and aircraft carriers. Companies are also implementing various strategies, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to expand their product portfolios and improve their nuclear powered naval vessels market reach. The key players mentioned below.
In the News
- In January 2025, US-based company Ultra Maritime and Indian defense PSU Bharat Dynamics Limited (BDL) partnered to co-produce sonobuoys. These devices are used to detect underwater movement, especially of submarines, for the Indian Navy at Vishakhapatnam. The factory is expected to become operational by 2027.
Author Credits: Dhruv Bhatia
- Report ID: 7135
- Published Date: Feb 17, 2025
- Report Format: PDF, PPT
