Is there a word to describe something new, but completely unnecesary?

The word newfangled seems to be what you're looking for

recently made for the first time, but not always an improvement on what existed before

Other definitions include

New and often needlessly novel.

As can be seen, this word is often used in a negative sense, to imply that something is needlessly innovative, with no improvement, and possibly a worse result, which appears to be the meaning you're trying to convey.

car manufacturers are putting newfangled displays in place of dashboards, but those displays still show ...

A frequently used term for a feature that is incorporated into the design of something to attract attention, by appearing to make the thing significantly better, even though its actual effects on the thing's usefulness are minor, is gimmick. The term is most often used for apparent technological improvements of consumer products, that are intended to impress the potential buyers, and so increase the sales, but it can be used in other contexts as well.

Not a word but often I use the phrase "cosmetic upgrade" to describe such things, if that helps.

The word we use at work is contrivance. But that word seems contrived...

A concept that fits your example is a skeuomorph, though not necessarily the shade of meaning of not being an improvement - for example, it applies to the icon for most email programs being a picture of a physical envelope, and for many use cases email is better than physical mail.

A skeuomorph is a derivative object that retains ornamental design cues (attributes) from structures that were inherent to the original. Examples include pottery embellished with imitation rivets reminiscent of similar pots made of metal and a software calendar that imitates the appearance of binding on a paper desk calendar.

(I linked to wikipedia rather than an authoritative dictionary as dictionaries don't tend to have as useful examples, e.g. MW just has 'an ornament or design representing a utensil or implement' which doesn't correspond much to how the term is used in the design community)

Isn't the word "novelty" what we are searching for. Isn't it exactly this?

No, broadly, there is not. Sadly no-one can Post examples of something that is not.

If there were such a term, the Posted example would miss it by a long way.

Car manufacturers put - presumably you mean digital - displays in place of dashboards and those displays still show two round dials for speedometer and tachometer but by no means is the difference "only" that they're shown on screen rather than mechanically.

Here, it matters not, but if you're interested in instrumentation design why not launch a new Question elsewhere on SE?

I would use the word "fad" because that is really what such things are. They are (temporarily) new and popular but will over time lose popularity. It implicitly connotes that it is unnecessary as well.

Such features not necessarily enhancing functionality are usually added for decorative value and are called embellishments and when they are considered completely unnecessary, they are called frills (perhaps more widely used in the form "no-frills" or "no frills").
Incidentally, the second example under the definition of frill below closely matches your own example.

Lexico:

embellishment
NOUN
1 A decorative detail or feature added to something to make it more attractive.

‘architectural embellishments’

frill
NOUN
2 (usually frills) An unnecessary extra feature or embellishment.

‘it was just a comfortable apartment with no frills’

However, thanks to its extra frills like a high-resolution screen and the camera, it retails at a steep price of $999.’

no-frills
ADJECTIVE
[attributive] Without unnecessary extras, especially ones for decoration or additional comfort.

‘cheap fast food in no-frills surroundings’

I like the word disimprovement. For me, it carries with it the connotation of something that was intended to be an improvement but is actually the reverse. However, my (paper) copies of Merriam-Webster's New International and the Shorter Oxford dictionaries do not distinguish it from the more general idea of worsening.

(Incidentally, I agree with other respondents that modern electronic dashboard displays are better than the old mechanical ones and not an example of disimprovement.)