They say if you want to know what all cars will do or have in 15 years, look at what Mercedes is doing today. The Silver Arrow has been pointing the way toward some of the coolest auto gadgetry of all time almost since it existed; no great shock then that it was one of the first to adopt the key security systems so common today.
The 1997 model year E320's ignition key does indeed contain a transponder chip; this chip, combined with the key fob transmitter, does a few things. The W210-generation Mercedes E320 used what was known as "Drive Authorization System, Series 2," or DAS-2 for short. Every Mercedes produced since the company adopted DAS-1 in 1993 has been registered to Mercedes' international database. This database contains a list of car VIN numbers and their associated transponder keys. Each car's security system can recognize up to eight different transponder keys. Your original keys were No. 1 and No. 2 on that list; to get a new key, you'll have to contact Mercedes, and they'll send you the No. 3 key. And so on up to the No. 8 key. Once you have the new key, you'll have to have a Mercedes service technician go in and disable the old key code.
If you've managed to lose all eight keys that your security system can recognize, you'll have to order a new security module, and have it installed by Mercedes and registered to your car.
