Some information on the BMW EWS-Immobilizer
I've been seeing a number of posts on the forums and I've gotten at least 2 calls from E46 owners that are having problems with their key starting their car. In particular the EWS - Immobilizer not allowing the car to start. The keys that came with the car have a small transponder chip in them (even the valet key which doesn't have buttons) which gets read by the car when the key is in the ignition. The transponder gets it's power from the EWS pickup coil located around the ignition switch. The code sent by the transponder is picked up by the EWS coil and compared with a list of good codes programmed from the factory. If it's not on the list the EWS deactivates the starter motor. Everything will still work, radio, lights, doors, windows, everything. Just not the starter motor. In some cases I've read the car will intermittantly start with only 1 of the keys, the other keys start the car fine. In this case the problem is probably a bad key transponder. There is a lot of mis-information on the forums, like it's the key fob battery, no the key fob battery has nothing to do with the EWS system and starting the car. It only powers the lock, unlock and trunk release buttons. Another one is recoding the key to the car will help (See recoding procedure), NO, No it won't. The recoding procedure only codes the GM5 module to the key for locking, unlocking and popping the trunk, again it had nothing to do withe EWS system and will not help. The only place to get a working transponder is from the dealer in a new key. This will cost about $200. Below is an E90 key that I tore apart. The EWS transponder is the black rectangle on the center left side.
If you buy an eBay key it will not contain a valid transponder and the transponder will need to be transplanted from a working key into the aftermarket key for it to start the car.
GM5 Repair Service web page.
To V23078-C1002-A303 web page.
To V23072-C1061-A303 web page.
BMW General Module II (GM2) Page
BMW General Module III (GM3) Page
BMW General Module IV (GM4) Page
BMW General Module V (GM5) Page