On a grueling 118 km stage, which began and ended at the Falls Creek Ski Resort, the 2018 Vuelta a España was no match for his less-fancied rivals, finishing 27th and dropping nearly six minutes to the new race leader.
That rider is Sunweb's Jai Hindley, who produced a strong spring at the top of the climb to win the stage, beating out Mitchelton-Scott's Damien Howson and St George Continental's Sebastian Berwick.
The Australian trio now occupies the general classification's podium positions after a climb that became a true survival of the fittest, with the lead group shrinking one rider at a time throughout proceedings.
Initially, Mitchelton-Scott took the front as the Falls Creek climb began looking to set the table for a late Yates attack, but just as he was ready to be called upon with 6 km was found spat out the back of the lead group.
It left the door open for 2016 Herald Sun Tour winner Howson to become the team's leader, but he simply could not match Hindley in the sprint to the finish line.
Earlier, fresh from taking most aggressive honours in Shepparton on Wednesday, Bridgelane's Ben Hill was on the attack inside the opening 10 km with Oliver's Real Food Racing's Angus Lyons, but the breakaway became a seven-man group as five riders covered the gap.
The break had three minutes on the peloton with 60 km to ride, but Lyons did not want to hang around, going off the front in a solo move, quickly building a 30-second gap.
But the move was never likely to work long-term and he was reeled in as the climb ramped up.
Stage three begins in Bright tomorrow and - after two early climbs - it is expected to be a stage for the sprinters with a flat finish.
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