Car Thing is basically the Rabbit R1, but for music. In other words, a cheap Android device, with one app (a car dashboard variation of Spotify), a scroll wheel, and a some shortcut buttons.
It works by connecting to your phone via Bluetooth. So, yeah, instead of using the phone for the auto friendly UI, it pipes that UI to a second cheaper mobile device.
It’s truly stupid, and it cost about the same as an external CarPlay / Android Auto screen… which could display an auto friendly Spotify UI, and much much more.