Spotify is lossy audio just like MP3s (although they use the Ogg Vorbis codec instead). Mushy, compressed low quality audio equivalent to about 3-4 times lower than CD. The streamers are notorious for offering brickwalled masters as well. Spotify HIFI was supposed to be coming last year but still no sign of it.
If you want to listen to the best fidelity then it's with your own lossless ripped music using FLAC for example. Plus no need to pay for premium connectivity. I've just partitioned a WD Black 1TB SSD with 2 parts. TeslaCam for dash cam footage and a media partition for Music, Boombox, and Lightshow. This thread may also have some info.
[V9] How to Format USB into 2 Partitions for DashCam and Music [Windows]
The Tesla interface for USB audio is
pretty rubbish though. It also doesn't remember/resume what you were playing if you park the car! Grrrr it's so annoying! The album artwork has been fixed though. Tesla really should try putting some effort into improving this. It's pretty poor having broken code that it doesn't remember what was playing.
They should also look into playing back multichannel music.
Dolby Atmos is going to be available in the Lucid Air. Hopefully there could be an app from the rumoured upcoming Tesla App Store that could solve all this one day.