I'm sorry, I just still don't see elephants as being a good battle tactic. Sure, they're big, but not BIG as in the beast that Legolas took down in the lord of the rings. And Gimli said "That still counts as one!"
Elephants would probably be 3 times the cost of a spirited charger because of its rarity due to widely varied climate that Calradia has, and still be as easily killed as a saddle horse. If not even more so, with the much larger hit box. Instead of squeaking through a narrow gap in sea raiders and a single axe grazing your horse, there'd be multiple axes in your elephant. Projectiles would also NEVER MISS, because it's so big.
I know what you're thinking. "If the player wants to be stupid and bring a giant bullseye mount to battle he can.", but that's generally wrong.
Imagine how the factions would feel about elephants. Nords and Rhodoks are already out of the question, because their troops don't use horses. Khergits wouldn't want them either, because they're too slow and too big. This leaves Swadians and Vaegirs. A swadian knight would not be caught dead on an elephant, because then their weapons would be unusable. Now, this leaves only the vaegirs, who live in the snow. So who would use these elephants? The knights? then their weapons are useless. The marksmen? Then you've got 10 marksmen, one of them on an elephant. Does that make sense?
So, how many merchants do you think would breed and sell elephants when the only person who would consider them a mount for combat is the player himself?