If your Android Auto main unit seems to have been hit by a bad case of JPEG, you're not alone. There have been some recent reports that systems with Android Auto-powered display "pixelated" blocked images. Fortunately for those affected, Google is working to fix things.
An example of the effect of the Google product forums
The reports are varied, without a brand or model of car or phone seems to be involved, and the accounts cover a range of versions of Android operating system Nougat 7.1 to Oreo 8.1- although it is reported that a large number of affected devices are Pixels. The problem manifests itself as can be seen above, with what look like compression artifacts in blocks or "pixelated" reminiscent of low-speed video.
An explanation of the problem has not yet been offered, although in a publication on the subject an Android Auto team manager pointed out that the company is working to solve the problem. So, if you are among those who are experiencing this particular problem, Google is investigating it.