This paper investigates AC induction motor shaft voltage problems, current flow through motor bearings and electric discharge current problems within bearings when operated under both pure sinewave and pulse width modulated (PWM) inverter sources. Experience suggests that PWM voltage sources with steep wavefronts especially increase the magnitude of the above electrical problems, leading to motor bearing material erosion and early mechanical failure. Previous literature suggests that shaft voltage-bearing current problems under 60 Hz sinewave operation are predominantly electromagnetically induced. It is proposed that under PWM operation these same problems are now predominantly an electrostatic phenomenon. A system model to describe this phenomenon is characterized and developed. Construction and test of a new electrostatic shielded induction motor (ESIM) verifies this model and is also a possible solution to the bearing current problem under PWM operation. >