After updating Gradle to com.android.tools.build:gradle:3.1.0, in the log I now see:
Folder E:\\WORK\\App\\car_android\\carapp\\build\\
This happens because the Kapt annotation processor uses this directory to store Kotlin generated files.
The directory is a new generated source set, the same way you can split your source files into src/main/java and src/main/kotlin
However the Android Gradle plugin does not recognize this directory as a generated source set.
For the most part this is completely harmless as most 3rd party processors are generating .Java files. Kapt writes them to the build/generated/source/kapt directory.