chronon

Per my other post, I found in the manual that the highest quality for files played on PCM (991.2 car) is only 320kbps which is significantly lower than CD quality (1411 kbps). As such, I conducted some test that concluded that to get the best quality, I recommend that you use carplay connected to a cable. That way, you are not limited by the DAC of the car (320kbps limitation). See my conclusions below. Happy to answer any questions.

Formats tested (all converted from CDs via iTunes)

USB with 320k files
USB with 1411k files (apple lossless)
Aux with Pono player 1411k files (apple lossless)
CD
CarPlay with Tidal at CD quality 1411k

I tested the following bands to have a range of dynamic range: Bjork (debut), Pink Floyd (Dark side of the moon), Supertramp (Best of).
Here are my conclusions:

#1 Best Overall - CarPlay w/tidal connected via cable. Dynamic range is great and bass is punchier than all other options (very noticeable). It does not perform as well as CD on very high notes but it is certainly more convenient. 9/10

#2 CD - As expected sound is very balanced. There is very little difference vs Tidal via carplay. It excels on high notes (eg harmonica on logical song by supertramp) but I am not about to start carrying all my CDs in the car. 8/10

#3 Pono Player via Aux - overall good sound but you can hear a bit of hiss on quiet parts. The problem is that since it is going into aux you cannot control via car screen. 7/10

#4 USB - OK sound and, as predicted, there is NO difference in 320k files vs 1411 apple lossless files. It seems that as per the manual, the car maximum resolution is 320k (As an analogy to those not as familiar audio, it is like playing 4k DVD on a black and white TV.....the images will be black and white no matter how good is your source). 5/10

Hope this helps others to get the most out of their system.