A propulsion unit is disclosed, which can include a casing, a shaft, a propeller, an annular housing and a rim drive electric motor. The casing can be rotatably supported at a hull of a vessel. The shaft can be rotatably supported with bearings within a lower portion of the casing. A propeller can be attached to an outer end of the shaft protruding from the lower portion of the casing. The annular housing can surround an outer perimeter of the propeller and can form a duct for water flowing through the interior of the annular housing. The rim drive electric motor can include a rotor rim provided on an outer perimeter of the propeller and a stator provided within the annular housing. Oil lubricated roller bearings can be used on the shaft within the casing. The axial length of the propulsion unit can be short.