Police were called to the De Beauvoir estate in Hackney on Saturday, where the dog died shortly after being taken out of the car.
The car's owner, a 27-year-old man, was arrested at the scene after returning to the vehicle and releasing the dog.
A passerby sounded the alarm and rang the police, who said several people were pouring water over the animal as it breathed heavily on the pavement when they arrived.
Police took the dog to a local animal hospital but it died before they arrived.
The man was arrested on suspicion of committing animal cruelty and released on police bail. He will return to an east London police station in September.
The results of an RSPCA portmortem are still awaited.