It's certainly a bad thing from a UX perspective. The number of controls in a car / aircraft is a very typical example of why modes are bad. One button for one action is the easiest to learn over the long run, there is a clear mapping in the drivers head of what each of the controls does. They all have different affordances, which is much harder on a touch screen.
However saying that, there's clearly problems with BMW's car UX [0]. Tesla have put a lot of thought into the UX [1] but it seems to be more on a grand scale with specific user cases in mind (your garage magically opening as you approach), rather than the mundane of reducing the number of clicks for the average task.
[0]: https://www.nngroup.com/articles/why-consumer-products-have-...
[1]: https://uxmag.com/articles/tesla%E2%80%99s-groundbreaking-ux...
They put knobs with LCD screens within the larger LCD center panel, and they put tiny OLED screens on the steering wheel buttons.
Tesla's UI design is an obtuse dead end.
Radios, HVAC controls, gauges, and the fancy dashboards which contain them are among the most expensive parts to develop in terms of both time and money. The amount of time Tesla saved in PPAPs (Production Part Approval Process) alone might be as much as a year and when working with a timeline as aggressive as those demanded by Musk, anything that reduces development time is more valuable than gold.
It's a genius way to reduce the time needed to bring a car to market, the final bill of materials, and the complexity of assembly and installation of such a key component as a dashboard. It's a terrible idea in terms of driver experience but those are the kinds of compromised that must be made to bring something like a Model 3 to market at the promised $35,000 price point.
Bringing a car like the Model 3, with all the features promised over the years, into mass production (100k+ per year production rate) within a timeframe required to secure a position in the market where 100k example can be sold necessitates such wild thinking. Yes, it's a terrible design for the driver, but Tesla beat every other manufacturer to the punch by at least 4 years. The "everything is contained in one, basocally off the shelf touchscreen" idea makes part of the ownership experience worse bit it got the Model 3 in consumer's hands at least 1 year earlier than it would have been otherwise and likely shaved a grand or two off the final base price.
I'd never buy a Model 3 because the touchscreen is so offensivley terrible. However, when a quarter million people are willing to put their money down to buy one simply due to the range, pricw point, and expected launch date, then any compromise that helps get the car into their hands as promised, without a revolt among depositors, is "smart" in its own right.
But then again Tesla assumes their cars will be driving themselves anyway so getting distracted trying to adjust the AC should not be a problem...
Air conditioning? Yes. On longer drives, the positioning of the sun greatly determines whether or not my AC is running. Radio stations also are frequently changed, as is volume. If someone is talking to me in the passenger's seat, I instinctively turn down the volume of the radio for example.
I personally prefer physical buttons for these various tasks. Physical buttons are always there. I don't have to look at the screen to ensure that I'm on the "correct app" or whatever before trying to fiddle with the AC or volume.