In an elastic collision, although total energy of a system is always conserved, kinetic energy carried by the moving objects is not always conserved. It is lost in the environment.
In an inelastic collision, energy is lost in the environment and transferred into other forms such as heat. When total kinetic energy is not conserved, then that collision is called as an inelastic collision.
Although momentum is conserved in inelastic collisions but it is difficult to track the kinetic energy through the collision since some of it is converted into other forms of energy.
An inelastic collision in a ballistic pendulum. Another example of an inelastic collision is a ballistic pendulum or dropped ball of clay. A dropped ball of clay doesn't rebound instead it loses kinetic energy through deformation on hitting the ground and changes shape.
To know more about inelastic collisions, refer
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