Tesla chief executive Elon Musk said the company would produce Model Y with a new structural battery design and technology at its Berlin factory next year and that could result in a "significant production risk", Reuters reported.

The report said the automaker plans to manufacture a new version of its Model Y crossover vehicle, and possibly even battery cells at the site. Last month, Musk said Tesla would use its German plant to demonstrate a radical overhaul of how its cars are built.

The company plans to start Model Y output at Gigafactory Berlin during the second half of 2021, Reuters said.

The report said Tesla's new battery cell - a larger cylindrical format called 4680 that can store more energy and is easier to make - is key to achieving the goal of cutting battery costs in half and ramping up battery production nearly 100-fold by 2030.

The company's new structural battery pack requires the new 4680 battery cells in order to work.

Musk said it would take about two years for Tesla factories in Fremont and Shanghai to embrace the new technology, Reuters added.

"Fremont and Shanghai will transition in two years when new tech is proven," Musk said in a tweet.