Tesla's chief executive, Elon Musk, has said Berlin will be the site of its first European factory, and its fourth worldwide after it finishes up construction on the third outside Shanghai, China.

The electric car company's next "gigafactory" will be built on the outskirts of the German capital, Musk confirmed at a prestigious German car awards ceremony in the country on Tuesday.

"Everyone knows German engineering is outstanding for sure," Musk said at the Golden Steering Wheel awards in Berlin. "You know that is part of the reason why we are locating Gigafactory Europe in Germany."

Musk said the facility would be located near Berlin's new Berlin Brandenburg International Airport and later gave more details on Twitter on what the factory would produce.

Tesla "will build batteries, powertrains and vehicles, starting with Model Y lower-priced sports utility vehicle at the factory", he said. In a recent earnings report, Tesla said it aimed to start production in Europe in 2021.

Musk cited risks surrounding the United Kingdom's exit from the European Union for his decision, according to AutoExpress. "Brexit (uncertainty) made it too risky to put a Gigafactory in the UK," he told the trade magazine.

The company's second Gigafactory, a repurposed SolarCity facility, is in Buffalo, New York, and Tesla's first opened in 2016 outside Reno, Nevada.

Tesla will be taking on BMW, Mercedes, and Volkswagen, on their home territory as they start rolling out zero-emission vehicles, Reuters reported. The German government intends to transform the country into a center of excellence for electric mobility, it said.

Economy Minister Peter Altmaier said in a statement on Wednesday that there had been no discussions about government subsidies for Tesla. "Subsidies have not yet been discussed. It's clear that Tesla — if it invests in Germany and creates jobs here, will be treated like all other companies in the automobile and automotive industry," Altmaier said. "That means we will treat all players who invest in Germany equally and without discrimination."

Musk has been speculating on a European production site for several years, and various European countries had mounted campaigns to lure the manufacturer to their soil. He's said he wants to build up to as many as 10 or 12 around the world.

Berlin's minister in charge of economic affairs, Ramona Pop, told public broadcaster RBB there had been talks about creating 6,000 to 7,000 jobs in production alone, with hundreds or even thousands more in areas such as design, software or research.