Spotify announced the discontinuation in their earnings call this week:

“The goal of Spotify’s Car Thing exploration was to better understand in-car listening, and bring audio to a wider range of users and vehicles,” a spokesperson told TechCrunch. “Based on several factors, including product demand and supply chain issues, we have decided to stop further production of Car Thing units. Existing devices will perform as intended. This initiative has unlocked helpful learnings, and we remain focused on the car as an important place for audio.”

It's a bit of a shame because it was a fun experiment, but I guess I shouldn't be surprised by this news. With basically every car in recent years coming with CarPlay or Android Auto built in, a separate device for Spotify didn't make a ton of sense. It's certainly more compelling for people like me who drive a 10+ year old car, but it doesn't seem that market was too keen on this single-function device either.