The Germans had a faulty approach when it came to naval affairs. Hitler was, personally, more interested in massive columns of fast-moving infantrymen and monstrous tanks blitzkrieg-ing their way across Europe than ships on the sea who couldn't - in theory - directly interfere in the military actions of the land. And when he did had his attention on the German Kriegsmarine, it was to build massive, 45,000-ton battleships which couldn't be easily replaced, rather than assembling a bigger, more effective fleet of corvettes, minelayers, troop carriers and landing craft, which was one of the main components of the inconclusive Operation Sea Lion.
But let's say Hitler wasn't a crackpot and was able to wisely utilize his resources to develop a careful naval force, focused on small craft rather than a few, titanic battleships and cruisers. He invests his resources to finalize this grand operation by 1938, having a fully-functional, highly-effective navy by the time Germany invades Poland.
How could the war occur differently?
This might help, found it someday on the net.
(Kriegsmarine) Third Reich
Of special note is the Anglo-German Naval Agreement, which limited Germany's navy to 35% of the Royal Navy for all ship types, with an exception for submarines (aka Germany was allowed to build of each class up to 35% of the Royal Navy's tonnage of that specific class). In regards to submarines, Germany was allowed to have its total submarine tonnage be no more than 45% of the Royal Navy's total submarine tonnage (I think; the wording of paragraph f in the link above is chock full of "legalese" and hard to decipher which "total tonnage" the 45% refers to, the RN's submarine tonnage or its total tonnage). Germany's goals in pursuing the agreement was to get British approval in regards to expanding the German navy and therefore improve relations, and to send a signal to the UK that Germany didn't want to repeat the pre-WW1 naval arms race. The UK's goal with the agreement was to limit Germany to building a "balanced fleet", which the UK felt was much less dangerous and easier to destroy than a Kreuzerkrieg (cruiser war) fleet. The UK felt that a German navy composed entirely of cruisers and submarines would be devastating to the UK and very difficult to defeat, and thus felt it won a victory when Germany agreed to limit construction to 35% of the UK's fleet on a per-class basis.
Germany, ships commissioned in 1936
* 2 Deutschland-class pre-Dreadnought Battleships (despite having the same class-name as the Panzerschiffe, these are actual battleships commissioned in 1908; these old pre-dreadnoughts were hopelessly obsolete when commissioned, let alone in 1936; the Schleswig-Holstein fired the first shots of WW2 by attacking the Polish base at Westerplatte)
* 2 Deutschland-class Panzerschiffe (fancy name for heavy cruisers with 11" guns instead of the 8" guns every other CA used due to treaty limitations, these ships were to be used as commerce raiders)
* 3 K-class light cruisers
* 1 Emden-class light cruiser
* 1 Leipzig-class light cruiser
* 1 Nürnberg-class light cruiser
* 12 Möwe-class heavy torpedo boats (these ships were the size of destroyers but armed exclusively with AA guns, mines, and torpedoes; these are the destroyers in the 1936 OOB)
* 8 Type IIB-class submarines (the Type IIs were coastal subs)
* 6 Type IIA-class submarines
Germany, ships launched by 1936:
* 1 Deutschland-class Panzerschiffe
* 4 1934-class Destroyers
* 10 Type IIB-class submarines
* 2 Type I-class submarines (ocean-going subs)
Even before the rise of Hitler and the NSDAP, Germany was considering attempt to rearm its navy in violation of Versailles. In 1932, Reichswehrminister Wilhelm Groener presented a plan to build a carrier, expand Germany's destroyer force (which didn't exist at the time), and establish naval aviation and submarine arms for the Reichsmarine. To this end, after WW1 the Weimar Republic created a dummy Dutch firm known as NV Ingenieurskantoor voor Scheepsbouw, which designed, built, and sold submarines to Turkey, Finland, the USSR, and Spain. IvS also designed the Scharnhort-class ships and their Dutch equivalent, the Design 1047-class battlecruiser. The Scharnhorst and Gneisenau were designed shortly after the NSDAP coming to power and after the 1934 Build Plan below was created. The Anglo-German Naval Agreement was critical to Germany in part due to the fact that the Scharnhorst was already under construction, and Hitler wanted to legitimize its construction with the UK.
Germany, 1934 Build Plan (pre German-Anglo Naval Agreement), additional ships only:
* 3 Aircraft Carriers (none started)
* 0 or 2 Battleships (the first two Panzerschiffe in this plan were upgraded to fast battleships in response to the French Dunkerque and became the Scharnhorst and Gneisenau; this was done prior to the Anglo-German Naval Agreement, so I put those ships here since their funding came from this build plan)
* 8 or 6 Panzerschiffe (the KMS Graf Spee was started prior to this plan and not included in the 8 additional ships; 2 of these ships were upgraded to battleships in the design phase)
* 18 cruisers (no distinction made between heavy and light in the source I found; I would assume CLs)
* 48 destroyers
* 72 submarines
So, to sum that up, the 1934 build plan would result in a Kriegsmarine consisting of, using in-game units, 2 BC (the pre-dreadnoughts), 3 CV, 11 CA, 24 CL, 10-16 DD (depends on if you want DD units to be 3 ships or 5), 7-15 SS (depends on if you think subs units have 5 ships or 10), and be completed by 1949. The reason for the long buildup time is because when this plan was made, Germany still had to adhere to the Versaille Treaty limitations, and the Germans felt that by 1949 they could've gained the necessary knowledge to build aircraft carriers (Germany had started converting the passenger liner Ausonia into a carrier near the end of WW1, but didn't finish it, and thus had no experience building such ships since then) and change the global political situation to allow them to build the larger ships. Germany also didn't want to antagonize the UK, which Hitler sought in 1934 as a potential ally against the French and Soviets.
Of note is that the 26 submarines (the 4 in-game units) completed or "in the build queue" in the 1936 start are from this build plan, as well as the destroyers in the build queue. I have no idea what the level II destroyers already finished in the '36 vanilla OOB are, because the level II destroyers in the build queue are the 4 1934-class destroyers I mentioned above. The level I destroyers are the Möwe-class heavy torpedo boats. Also, building the Scharnhorst and Gneisenau as a replacement for two of the Panzerschiffe would fit into the '34 build plan, because those ships were designed and construction started shortly after the '34 build plan was made, after Hitler was persuaded to upgrade the ships from being Panzerschiffe to battleships.
Later expansion plans, Germany, 1938 Bauplan III, total fleet size:
* 6 H-class Battleships
* 2 Bismarck-class Battleships (designed for both commerce raiding and surface combat)
* 2 Scharnhorst-class Battleships/Battlecruisers (the Royal Navy called them BCs due to their small guns, while everyone else called the BBs; after the war the RN reclassed them as BBs; they were designed for commerce raiding)
* 2 Graf Zeppelin-class Aircraft Carriers
* 6 unknown-class Aircraft Carriers
* 12 P-class Panzerschiffe
* 3 Deutschland-class Panzerschiffe
* 5 Admiral Hipper-class Heavy Cruisers (These used 8" guns just like every other CA in the world outside of the Panzerschiffe; designed for commerce raiding)
* 24 M-class light cruisers (these would've been scouts for the commerce raiders)
* 36 Spähkreuzer-class heavy destroyers (these would've been screens for the battleships and carriers, their name translates to "scout cruiser")
* 158 Destroyers and Torpedo Boats
* 249 Submarines
Note that the 2 pre-dreadnoughts and the light cruisers that Germany gets in vanilla aren't counted here. The whole fleet was supposed to be completed by '47. You won't see the Spähkreuzer destroyers in a vanilla game either, and will either need to play a mod that has a destroyer model for them (HPP for sure, maybe others), or a mod that has heavy destroyers, like ICE.
Germany, 1939 Plan Z (A revision of the 1938 build plan), total fleet size
* 6 H-class Battleships
* 3 O-class Battleships/Battlecruisers (depends on how you classify them, and varies by source; these ships had BB-type guns but cruiser-type armor and were to be commerce raiders).
* 2 Bismarck-class Battleships
* 2 Scharnhorst-class Battleships/Battlecruisers
* 2 Graf Zeppelin-class Aircraft Carriers
* 2 unknown-class Aircraft Carriers (since design work was never started, the class was never named).
* 12 P-class Panzerschiffe
* 3 Deutschland-class Panzerschiffe
* 5 Admiral Hipper-class Heavy Cruisers
* 12 M-class light cruisers
* 3 K-class light cruisers
* 1 Emden-class light cruiser
* 1 Leipzig-class light cruiser
* 1 Nürnberg-class light cruiser
* 22 Spähkreuzer-class heavy destroyers
* 158 Destroyers and Torpedo Boats
* 249 Submarines
The new ships in this plan were to be finished by 1945, the original planned year Hitler wanted to start the war. As a side note, Rügen Island was supposed to be transformed into Germany's main naval base as part of this plan.
To sum this up, Plan Z would've been centered around 4 core battle fleets consisting of 2 BBs, 1 CV, and 5 Spähkreuzer destroyers each, while the 5 BCs, 20 CAs, 18 CLs, and 249 SSs performed convoy raiding using the CL's as spotters. The remaining destroyers and torpedo boats would've been in a separate branch, performing coastal patrols and convoy escorting.
Germany, what it really built after 1936, new construction only:
* 2 H39-class Battleships (construction started, neither launched nor named)
* 2 Bismarck-class Battleships
* 2 Scharnhorst-class Battleships/Battlecruisers
* 2 Graf Zeppelin-class Aircraft Carriers (1 was launched, the other was started but not launched; neither ship was finished)
* 1 Europa-class Aircraft Carrier (converted troop transport, never finished)
* 5 Admiral Hipper-class Heavy Cruisers (3 were commissioned, 2 launched but not completed; Lützow was sold to the USSR, Seydlitz repurposed)
* 1 Weser-class Aircraft Carrier (converted Admiral Hipper CA Seydlitz, never finished)
* 2 Jade-class Aircraft Carrier (converted merchant ships Potsdam, and Gneisenau, never finished)
* 1 De Grasse-class Aircraft Carrier (converted French CL, never finished)
* 2 M-class light cruisers (construction started in '38, neither finished)
* 0 1944-class destroyers (8 planned, none finished; these ships were the resulting design from experience from the 1942-class)
* 0 1942-class destroyers (1 planned as an experiment with diesel engines, sunk by Allied bombers during construction)
* 0 1938B-class destroyers (12 ordered, all cancelled)
* 0 1938A/Ac-class destroyers (3 ordered, all cancelled)
* 0 1936C-class destroyers (6 ordered, all cancelled)
* 3 1936B-class destroyers (5 ordered, 2 cancelled)
* 7 1936A "Mob"-class destroyers
* 8 1936A "Narvik"-class destroyers
* 6 1936-class destroyers
* 12 1934A-class destroyers
* 61 Type XXIII-class submarines (coastal version of the Type XXI, these were by far the fastest subs in the world at the time).
* 118 Type XXI-class submarines (these subs had triple the battery power of the Type VII's and could operate mostly submerged).
* 7 Type XVII-class submarines (17 planned, 10 cancelled; these were experimental ships that used High-test peroxide as its fuel).
* 10 Type XIV-class submarines (24 planned, 14 cancelled; these ships only had AA guns and were used to supply other subs).
* 8 Type X-class submarines (these mainly acted as transport subs rather than combat ones).
* 32 Type IXD-class submarines (36 ordered, 4 cancelled; these mainly acted as transport subs rather than combat ones).
* 87 Type IXC/40-class submarines
* 54 Type IXC-class submarines
* 14 Type IXB-class submarine
* 8 Type IXA-class submarines
* 0 Type VIIC/42-class submarines (164 ordered, all cancelled in favor of the new Type XXI).
* 91+ Type VIIC/41-class submarines (91 commissioned, possibly more under construction).
* 568+ Type VIIC-class submarines (568 commissioned, possibly more under construction).
* 24 Type VIIB-class submarines
* 10 Type VIIA-class submarines
* 16 Type IID-class submarines
* 8 Type IIC-class submarines
* 2 Type IIB-class submarines