In 2005, DaimlerChrysler decided against purchasing a 50% share in the Dutch NedCar plant used to manufacture the Forfour supermini. DC also halted development on the Formore and decided to discontinue production of the Roadster. In 2006, after dwindling sales, smart GmbH was liquidated and its operations transferred within the Mercedes-Benz automobile group. It was later revealed that smart GmbH lost nearly 4 billion euros from 2003 to 2006. In the same year, DaimlerChrysler announced that it would also cancel the Forfour and redesign the Fortwo to debut in Europe in 2007. An electric, rechargeable version is being released in the UK, by a separate company, as a lease vehicle on a limited basis. At the Smart Car Brooklands event in July 2007, a Smart EV was on display within "MercedesWorld" and a representative stated that the car would be for sale in the UK in 2010.

Models: Apart from the original short smart Fortwo, a sporty smart Roadster, a limited production of 2000 concept smart Crossblade and a supermini smart Forfour were also offered. These have now been discontinued. There were also plans to introduce a small off-roader called the Formore but development of this was cancelled as a result of spending cutbacks. Fortwo, Forfour, Roadster, Crossblade, Formore, smart EV (At the moment only trialling, expected for Spring 2008 in UK). Smart cars have been modified to house motors from powerful Japanese sport motorcycles, such as the Suzuki Hayabusa 1352 cc inline four-cylinder. These cars are known as "Diablos" ("Devils" in English). The most powerful models can accelerate from 0 to 60 mph (0 to 100 km/h) in less than 3.5 seconds.

Before 2008, smart cars were only available in the United States as "grey market" imports, such as ZAP. U.S. federal regulations allow certain grey market importing in large quantities provided the vehicles are modified and tested to conform to U.S. safety and emissions regulations. Smart cars were imported into the United States by The Defiance Company LLC, modified by G&K Automotive Conversion, and distributed and sold by independent dealerships which were not affiliated with Mercedes. U.S. regulations did not permit the purchase and import of used smart cdi vehicles from Canada, as the diesel powered Canadian smarts did not meet American emissions regulations. Smart vehicles use a very small front crumple zone. The new Smart Fortwo has been awarded 4 out of 5 stars in the Euro NCAP Adult Occupant Protection, 2 out of 4 stars in the Pedestrian protection test but it was not tested for Child Occupant Protection as it has no rear seats. The original smart was awarded 3 out of 5 stars for Adult Occupant Protection. The main structure of the car is a stiff structure called a Tridion Safety Cell, which is designed to activate the crumple zones of a colliding vehicle. This design creates a very strong safety cell around the passengers. However, it also subjects them to higher forces during an accident than in a conventional car.