to let units fight in loose formation usually is not too good an idea. Ok, they cover more area and the immediate losses particularly vs. elephants are lesser, but units fighting in loose formation get a morale penalty. This penalty, although slight, undermines what most units are made for: hold their position and kill as many as they can before they die themselves or rout. If they rout, which they will do more likely on loose, only they (and not the enemy) will suffer more casualties.
Additionally, the chances of killing those elephants are better if the beasts are forced to run into a thick wall of, well, preferably spears. Against chariots try everything to keep your formation together; they will whoop it up anyway but if your men stay close they will most likely win through.
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