If your Android Auto head unit looks like it's been hit by a bad case of JPEG, you aren't alone. There have been some recent reports that Android Auto-powered systems are displaying "pixelated" blocky visuals. Thankfully for those affected, Google is working to fix things.
An example of the effect from Google's Product Forums
Reports are varied, with no one make/model of car or phone seeming to be implicated, and accounts cover a range of Android OS versions from Nougat 7.1 to Oreo 8.1—though a large number of affected devices are reported to be Pixels. The issue manifests about as you can see above, with what look like blocky or "pixelated" compression artifacts reminiscent of low-bitrate video.
An explanation for the problem hasn't yet been offered, though in a post on the subject a manager for the Android Auto team noted that the company is working to address the issue. So if you're among those experiencing this particular problem, Google is looking into it.
- Google Product Forums