"Over the next decade, cars will increasingly become robots on four wheels," CEO He Xiaopeng said. MUNICH—Chinese carmakers spent the past decade replacing gasoline engines with batteries. The next will be about integrating cars with robotics, XPeng's chief executive says.

His vision is for the electric-vehicle maker, dubbed "China's Tesla," to evolve into a physical AI company, expanding from smart cars into robotaxis and humanoid robots. Chinese automakers have won over customers at home and overseas with feature-rich, low-cost models. The competition that fueled technological advances has also sparked price wars that have squeezed margins, especially for those whose biggest market remains China, where demand has slowed.