This ship is used in the colonization of empty planets. Essential for any ambitious empire, they enable a colony to be settled. Upon landing, the ship is deconstructed to provide the initial metal and crystal required to start developing a colony.
On old universes, any resources sent in the cargo hold of a colony ship will be lost upon colonization of a planet.
However, in new universes, all resources sent in the colony ship's hold will be transferred to the new colony.
The colony ship is a special vessel used to colonize new planets. You can also use them as fleet saving tools, if recyclers or Death Stars aren't giving you the time you need to fleetsave, the slow Colony Ship might be a viable option. However, you don't need more than 1 per fleet, so save your resources.
Don't build colony ships if you are not going to use them. If you need a new colony, build the ship and send it out ASAP. If you have excess colony ships and don't know what to do with them, send them out on an attack mission with your ships: it has the same attack power as the Light Fighter but with 7.5 times the armor.