Applied electric fields are known to induce significant changes in the properties of systems of polarizable molecules or particles. For rod-shaped molecules, the field-induced behavior can be rather surprising, as in the case of the negative electric birefringence of concentrated solutions of rodlike polyelectrolytes. We have investigated the interplay of shape anisotropy and field-induced anisotropy in molecular dynamics simulations of systems of polarizable soft spherocylinders in an electric field, in the limit of infinitely anisotropic polarizability, taking full account of mutual induction effects. We find a novel crystalline structure (K-2) in the high-field limit, whose formation is driven by interactions between induced dipoles. For high pressures, the phase diagram exhibits a polar nematic phase between the hexagonal close-packed crystal phase and the K-2 phase. We also compare this system with an analogous system of spherocylinders with permanent electric dipoles and find that qualitatively similar behavior is obtained in the limit of strong coupling of the permanent dipoles to the external field. (C) 2004 American Institute of Physics.