I cant specifically talk about wartime construction at the moment, especially German construction. As I don’t have any of my primary sources available for that period. But I do have some information relating to the 1930s, especially British construction costs.

Basically not really, submarines were not particularly cheap. Cost per tonnage was actually the highest of all naval vessels, greater than Battleships, aircraft carriers all the way down to destroyers and sloops. I suspect the answer in part is obvious. Producing a safe and effective submarines was not something any shipbuilder could do. They required specialist plant and labour expertise and often even amongst the specialist naval yards some builders were more specialised than others in the production of submarines.

Of the dozen or so large British shipbuilders who built naval tonnage between the wars only 4 (or 6 depending on how you account for Vickers, Armstrong and then Vickers-Armstrong) built submarines. Vickers-Armstrong (and their predecessors), Cammel Laird, Scotts, Dennys and Beardmores. Compared to a much wider pool of naval arms manufacturers and shipbuilders that could build destroyers and even Battleships. Additionally HM Dockyard Chatham specialised in Submarine construction. Similarly in the US of the 16 yards that produced naval tonnage over 1000 tons between the wars only 6 yards produced submarines (Electric Boat, Todd Tacoma, Bethlehem – ForeRiver/Quincy, Bethlehem Union Iron Works/Almeda, Portsmouth NSY and Mare Island NSY). Submarine construction was a specialised sub set of an already specialised industry.

This specialisation can be seen further in the export market where several countries (Britain and France) dominated the market, followed distantly by Italy. Only Netherlands, Germany, United States and Spain exported any submarines in the interwars years despite Submarine sales representing the biggest slice of naval exports in the period. Interestingly you can begin to see the subtle encroachment of German industrial interests in Baltic submarine exports, especially to Finland through subsidiaries in the Netherlands.

Costs can be tricky, primarily because they can differ widely based on size and complexity and experimentation. Also in some accounts costs are split between hull and machinery for example or across multiple contractors. In some cases comparing costs at Dennys to those at say Vickers is complicated between Vickers being the sole contractor while Dennys sub contracting machinery. Likewise the split between costs at HM dockyards between the Hull build in the dockyard to the machinery produced elsewhere and the fitting at the dockyard. Costs could vary considerably based on demand and workload, depressions in the shipyards could depress ship costs down towards the bottom-line to for domestic sales to national governments, yet driven high to export markets. Submarine export markets were perhaps the most lucrative of all ship exports.

From the British Shipbuilding Database submarine costs range from approximately 150k per vessel to over 500k. But again this range may reflect differing contract machinery costs and arrangements. Across the depression era between 1929 and 33 subs in British yards could still range from 270k to £577K. The most expensive being HMS Thames built and equipped entirely by Vickers-Armstrong. This was a big submarine displacing over 1800 tons

In comparison, on average, roughly a destroyer of the same period would cost around £250k, so a similar figure for generally a larger tonnage. A small modern cruiser approximately £1.5m and a large cruiser up 2m. A new battleship produced in the late 30s would be roughly £8m and a similar cost for an aircraft carrier. Regular upkeep of a battleship could cost £250k for a refit and up to 2m for a full reconstruction.

So for some more specific costs lets look at the Navy Estimates for 1932 (and beyond for some planned construction).

For context this is a period often caricaturised as the “nadir of naval spending” in some naval history, mostly overlooking the acute demands on public finances. Either way British naval budgets were some of the lowest of the period asking for just over £51m of which approx. £17m was for new and ongoing dockyard work and construction. (5m for maintenance and repairs, 6.7 for new construction and the rest on ongoing contracts and Dockyard costs and labour).

Under new construction the new Destroyer Leader HMS Duncan built at HM Portsmouth was to be constructed for a cost of approx. £324k for hull, machinery and weapons. While the smaller Basilisk and Beagle were £560k for the pair all in (280k) from John Brown Shipyards. HMS Crusader and Comet £641k for both (320k). the destroyer HMS Archeron built by Thornycroft was estimated to be £320k

The submarine HMS Rainbow was £425k, Swordfish, Sturgeon were £460k for the pair, as were Seahorse and Starfish in Chatham.

The new sloops being built at Chatham, a similar displacement to most submarines were coming in £355k for a trio or £180k each. The submarines HMS Thames and Porpoise at Vickers werea whopping £575k each.

In comparison HMS Exeter a new smaller large cruiser was to be built in HM Davenport for £1.8m split roughly 50:50 between Hull and machinery/guns/equipment The first Leander, a light cruiser also in Davenport estimated to cost £1.6m. HMS Achilles at Cammel Laird similarly 1.5m

Just from this slightly adhoc snapshot of costs we can see that Submarines were quite expensive, at least as expensive as full fleet destroyers and leaders and certainly more so than the kind of sloop vessels that would be hunting them. Of course construction cost isn’t everything, I have not specific details regarding the ‘on’ costs of running each different ship and I would be thrilled if anyone could point me to anywhere that has it. But I suspect the crew costs of submarine would be cheaper, offset slightly by the machinery and deployment costs.

All of this however doesn’t really answer your question as this is about peacetime building. Certainly, more efficient construction processes could and did speed and cheapen construction, but increasing sophistication of each unit would continue to inflate the same costs. This same process was of course happening with destroyer and escort vessels.

While of course submarines were cheaper by far than capital ship units, they were not particularly cheap vessels and in many cases more so than destroyers and certainly escort vessels.

I apologise for not really dealing at all with wartime construction, but I feel others probably have more insight. Im happy to provide more details on sources and literature if people want.