The elixir storage allows you to save your hard earned elixir so that you can use it for future upgrades. While a high level storage unit is capable of storing 2 million elixir, an attacker may only loot a maximum of 25% up to 199,000, by destroying it. When your elixir storage's are full, any elixir gained from raids will not go into your elixir storage, but will count to the total amount of loot stolen from the player.
The elixir storage building takes up a 3x3 space.
Elixir storages is still fully functional while being upgraded.
To protect your elixir, upgrading your elixir storage to a higher level than you require for storage purposes can save elixir as the attacker will get less elixir from you per hit. This gives more time for your defenses to destroy the attacker before they can steal all the available elixir.