Elves are warriors of the forests who are favoured because of their high initiative. i.e. that is they get their turns more often than other factions (excluding Tribals). Elves without luck and morale are bad elves, because luck provides you chance to deal double damage,which allows them to kill the enemy quickly. Their ability 'Favored Enemy' deals double damage. So, a combination of luck and favoured enemy can be deadly. Also, morale is required to gain their turns even faster, because it increases their initiative. Elves are very strong in hunts and other NPC Battles, and a group of elves can be dangerous against any combination. So, elves are very good distractions in battles.