How can I add unit test for android architecture components life cycle event?

You should be able to use the LifecycleRegistry

Your test would do something like below:

@Test
public void testSomething() {
  LifecycleRegistry lifecycle = new LifecycleRegistry(mock(LifecycleOwner.class));

  // Instantiate your class to test
  CarServiceProvider carServiceProvider = new CarServiceProvider();
  carServiceProvider.bindToLifeCycle(lifecycle);

  // Set lifecycle state
  lifecycle.handleLifecycleEvent(Lifecycle.Event.ON_STOP)

  // Verify that the ON_STOP event was handled, with an assert or similar check
  ...
}

If you are testing Lifecycle.Event.ON_DESTROY then you probably need to call handleLifecycleEvent(Lifecycle.Event.ON_CREATE) prior to this.

You can test using Unit tests without Roboletric as long as you mock the lifecycle owner properly.

val lifecycleOwner: LifecycleOwner = Mockito.mock(LifecycleOwner::class.java)
val lifecycle = LifecycleRegistry(Mockito.mock(LifecycleOwner::class.java))
lifecycle.markState(Lifecycle.State.RESUMED)
Mockito.`when`(lifecycleOwner.lifecycle).thenReturn(lifecycle)

Use this lifecycleOwner when you observe a variable and you can use Mockito.verify to see if your callback has been called

Despite of I am not a big fan, I would go with Robolectric making use of ActivityController to achieve this.

Given the fact that the "Observables" of the Observer pattern applied in Android Lifecycle workflow are Activities, Fragments... An application context is a must and we need somehow bring it to our test scenario.

I achieved the expected result by doing this

build.gradle

testCompile "org.robolectric:robolectric:3.5.1"

CarServiceProviderTest.java

@RunWith(RobolectricTestRunner.class)
@Config(constants = BuildConfig.class)
public class CarServiceProviderTest {

    @Test
    public void shouldFireOnClear(){

        //Grab the Activity controller
        ActivityController controller = Robolectric.buildActivity(JustTestActivity.class).create().start();
        AppCompatActivity activity = (AppCompatActivity) controller.get();

        //Instanciate our Observer
        CarServiceProvider carServiceProvider = new CarServiceProvider();
        carServiceProvider.bindToLifeCycle(activity);

        //Fire the expected event
        controller.stop();

        //Assert
        Assert.assertTrue(carServiceProvider.wasFired);
    }
}

CarServiceProvider.java

public class CarServiceProvider implements LifecycleObserver {

    public boolean wasFired;

    public void bindToLifeCycle(LifecycleOwner lifecycleOwner) {
        lifecycleOwner.getLifecycle().addObserver(this);
    }

    @OnLifecycleEvent(Lifecycle.Event.ON_STOP)
    public void onClear() {
        wasFired = true;
    }
}