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What is a transponder ?

Transponder is short for transmitter/responder, A transponder is a passive device (no battery), when the key is inserted and turned within the ignition the transponder is briefly energized by an electromagnetic current, the transponder then emits a radio frequency (in the region of 125KHZ) and the code within the transponder is identified, if the code is not correct (recognised by the system) the car will not start.

Many modern automobiles have keys with transponders hidden inside the plastic head of the key. The user of the car may not even be aware that the transponder is there, because there are no buttons to press. When a key is inserted into the ignition lock cylinder and turned, the car's computer sends a radio signal to the transponder. Unless the transponder replies with a valid code, the computer will not allow the engine to be started. Transponder keys have no battery; they are energized by the radio signal itself. ( from wiki )

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