my-custom-element.service.spec.ts

import {MyCustomElementService} from './my-custom-element.service.ts';
class MyCustomElementMock extends HTMLElement{
  config: ConfigModel;
  constructor() {
    super();
  }
}

window.customElements.define('my-element', MyCustomElementMock);

// now I am testing the service itself
describe('custom element service', () => {
  it('should do something', () => {
    const service = new MyCustomElementService();
    const config = new ConfigModel();
    const element = service.doSomething(config);
    expect(element.config).toEqual(config);
  });
});

my-custom-element.service.ts

import {MyCustomElement} from '../customElements/myCustomElement/my-custom-element.ts';

export class MyCustomElementService {
  doSomething(config) {
    const myElement = <MyCustomElement>document.createElement('my-element'); //If I inferer the original custom element here, tests won't work as well
    myElement.config = config;
    return myElement;
  }
}

export class MyCustomElementService {
  doSomething(config): MyCustomElementMock {
    const myElement = document.createElement('my-element') as MyCustomElementMock;
    myElement.config = config;
    return myElement;
  }
}