The sensor is just a thermistor which means that it changes resistance depending on the temperature.
The resistance is then converted to a temperature which is displayed on the speedo.
It also uses this sensor to control the air conditioning. If it's cold outside, the AC won't come on.
There are 3 possible issues that cause an incorrect reading on the speedo LCD.
Sensor thermistor has failed.
Connections are corroded or wet.
The wiring is damaged.
When the sensor, connection or wires fail, the resistance is
very high which the car interprets as a very low temperature.
Sensor Thermistor Has Failed
If the sensor has failed, you'll need a new one.
You'll find the old one in the right side of the lower edge of the bumper.
Turn the steering all the way anti-clockwise and look into the wheel arch, you'll see a pair of wires.
The sensor pulls out. It clips in place so no turning or twisting is required. You can lever it out if you want.
At the back of the connector is a tab that needs to be pushed down to disengage. However, it can be hard to get out.
Push the sensor into the connector, press the tab, hold it in and pull the sensor out.
The sensor should come out with a bit of force.
Spray some electrical cleaner onto the connections before fitting the new sensor.
As you may be able to see, there is no weather seal on this connection so it can suffer from water ingress.
You should get a reading which with go up or down depending on the heat or cold you apply to it.
If you get no connection (infinite resistance), the sensor has failed.
As we read before, water can easily get into the connector as it's not sealed and in a bad position for water spray.
If your sensor reads OK when attached to a multimeter, you may just need to clean the corrosion away.
Spray the connector and the sensor pins with electrical contact cleaner, connect and disconnect the sensor
a few times to allow the cleaning fluid to strip the corrosion from the connections. Blow on both
connections to dry them before refitting the sensor and checking the display on the speedo.
This one is a touch more awkward. You have to check the continuity of the wires to the speedo.
This is done with a multimeter but you'll probably need a friend to help.
You'll need to remove the speedo to gain access to the wiring connection on the back of it.
The wiring is as follows:
Sensor pin 1 - Grey wire - Speedo pin 3.
Sensor pin 2 - green wire - Speedo pin 12.
Go to smart and order part number A 000 542 84 18.
Cheaper copies can be bought on eBay but they may not be as good a quality.