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You are correct that Honda slowly made the Element more mainstream over the years it was in production.

In the beginning (2003) the target audience was 20's and 30's types. Just one look at the brighter paint colors offered at first should confirm that!

But, as the amount of competing vehicles increased, and with the economy slowly getting weaker (~ 2008 - 2011), Honda found that it was us aging Baby Boomers who were then buying Elements. Hence the more subdued colors available on the later models; which they figured was what the 50's and 60's types wanted. (Mistake!) Even with the SC model being made available starting in 2007, was an attempt at making the Element a bit more mainstream, with the carpeted interior and such.

But Honda forgot one thing: the old adage "You can sell a young mans car to an old man; but you can't sell an old mans car to a young man!"

But now with the economy greatly improved, I believe if Honda made a new & improved Element, it would sell very well for them! : - )
Yep. Same is true for the Toyota/Scion Xb. Fifty somethings were buying them to carry their antiques in, but unfortunately there weren't enough older or younger folks buying them for Toyota to keep them in production.
 

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As @Esmutko noted, there is a massive waste of space in van mode because the seats don’t come out; also, the element tailgate design is genius because it gives you somewhere to hang out when the vehicle is full of crap or there is a bed platform.

The element is a crap car but a fantastic form factor. The engine is terrible, brakes underpowered and it corners like an unweighted donkey. I would love to stick decent running gear under it (including the truly awful suspensio), soundproof the whole thing and replace the interior. But I’m not on an episode of car masters and I’m not rich so I’ll put up with the terrible car because the utility of the thing is unbeatable.
 
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