Cadillac has announced that its ELR electric + range extender coupe will start at $75,995. The most common reaction: what are they smoking?

Personally, I had expected the ELR to have a starting price of $49,995 if they were smart, $59,995 tops. After all, the related Chevrolet Volt has a $34,995 base price. The ELR is more stylish than the Volt, has a much nicer interior, and includes some additional high-tech features. But the same can be said of the Cadillac XTS compared to the Chevrolet Impala. The XTS lists for about $15,000 more base-to-base, and about $10,000 more when comparably equipped.

How can Cadillac possibly justify a $41,000 premium? One possibility: they’ve determined that the car isn’t going to sell. At least not in significant numbers. A few people of sufficient means will want one badly. Most others wouldn’t have bought the car even at $49,995. Also, unlike the Volt, the ELR is a coupe, meaning that after any initial frenzy sales are likely to fall off a cliff regardless. Buyers of stylish coupes tend to be only interested when the car in question is the new new thing.

Punch these factors into the formula to maximize profits (or at least minimize losses), and it’ll spit out a very high price. They’ll earn high margins from the few people who’ll buy an ELR no matter what. And people who think the price is too high? They probably wouldn’t have bought one anyway.

(Another line of argument others have suggested: the MSRP is irrelevant. Like the German manufacturers, Cadillac can subsidize leases to reach a number people will find attractive.)