I have the same year and model as yours. I use apple car play too and it works fine but I have never updated anything with Kia since it was new. I just plug my phone into the car with the wire to the usb port and after it says Bluetooth ect. are disconnected I just hit the car play button on the screen and it works. Maybe your fooling around with the car's stuff too much and should just set it back to when it was new????

 

Still working fine with my 2018. Most likely source of your issue is impacted lint in your port. It can be quite difficult to see, and difficult to remove (I initially discovered the problem via an Apple Store genius) - a dental pick works best (doesn't bend) but can be done with an open paper clip. I have to do it every year or so.

The other possible issue is your tethering cord. I'm not sure about USB-C connections if you have a new iPhone, but Lightning, at least the third party cables, can get wonky after several years. That's the point I'm at today in my car seven years later, sometimes it also does not connect to data (although charging is initiated) and sometimes several reconnections is required to get the data connection. I've extra new cables but have just been too lazy to try them out.

Also remotely possible is that the Niro is confused if you have used more than one phone with it. If so, go into settings and remove any phones you no longer use. Unlikely, but only takes a few seconds to clean the settings out. I had to do that once after replacing a phone. I'm not sure why as I read here about a lot of couples whose phones work no matter who is plugged in.