Several years ago I was playing around with an old 286 that I got from a friend. I had the case off and was trying to boot it when, as it was counting RAM, I heard an earsplitting POP! A few seconds later a thin wisp of white smoke came curling out of the horizontal case. I never could figure out what had blown, there was no visual evidence of anything going wrong. All I do know is the smoke didn't come from the PSU. Who knows. ... who cares?
Of course we all know that magical white/blue smoke is placed into bits of silicon to make them into IC's/CPU's etc. Once this magical smoke escapes they no longer work....
I think it is true, or at least parts of cars will no longer work. Although, when blue exhaust comes out the tail pipe, the car will die more slowly. But if emmiting from the engine, the car will be sure to be dead shortly.