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Loss mechanisms affecting the performance of an MHD seawater thruster system have been identified and discussed. Among those losses are the jet and nozzle losses, joule heating losses, surface potential and electro-chemical losses, frictional losses, and electrical end losses. Simple, but accurate, models have been used to assess the relative and absolute magnitude of these losses and to investigate their influence on the overall thruster efficiency. A parametric study has been performed for a generic full size seawater vehicle propelled by an MHD thruster at different operating conditions. The results of this study confirm that higher efficiencies can be achieved at high magnetic field strengths (> 10 Tesla). Furthermore, the results indicate that higher efficiencies can be maintained over a wide range of cruising speeds (2-20 m/s or 4-40 knots) at higher magnetic fields (20 Tesla).