Engadget
How to improve your audio quality on Apple CarPlay

Wired CarPlay uses LPCM, allowing lossless Apple Music streams (up to 24-bit/48 kHz) when an active subscription and lossless download are enabled, while wireless CarPlay falls back to lossy AAC-LC compression. Downloading high-quality tracks to the iPhone avoids cellular bitrate drops that degrade audio, though lossless files require ample storage.