Newgarden and Chip Ganassi Racing rival Scott Dixon arrived at Laguna Seca with a 20-point deficit to championship leader Will Power.
But hopes of closing the deficit to Power by landing the bonus point for pole were dashed in Q1 when Newgarden, setting a banker lap, clipped the triangular device that IndyCar has installed on the left kerb at the top of the Corkscrew to stop drivers shortcutting it or transgressing track limits.
The impact bounced the #2 Penske machine out of control at a point where the car is already light and it spun around into the gravel on the right-side of the track.
The 2017 and 2019 champion is due to start from 25th in the 26-car field, while Penske team-mate Power claimed pole to extend his margin to 21 points.
Newgarden commented: “Yeah, obviously it's not over yet, but it was an unfortunate session for us.
“Tough to make a mistake like that… It's been a long time since we've had one of those in qualifying, but it's happened now, and obviously didn't put us in a good position for tomorrow.
“But we're going to make the most of it, like we always do, on the #2 car.”
Explaining the mistake, Newgarden said: “I turned in too early and I hit the kerb. As soon as I hit the kerb, I was all out of sorts.
“You can hit that second one in the bottom, but if you touch the first one it's going to send the car in a mess.
“Kind of a simple error and a very sad error, so you know, we were done pretty early today.”
Dixon hoping for strategy to recover
Newgarden's spin and stall brought out a red flag and left drivers with only one more attempt at a flying lap, with Dixon - also in his group - also unable to progress from Q1.
The Kiwi will start 13th after his attempts to generate tyre temperature were stymied by Kyle Kirkwood of AJ Foyt Racing, who was ahead of him on track preparing for his qualifying run.
“We went out [initially] on new blacks and actually took a bit of time to get some speed out of it,” Dixon said. “The #14 kept backing us up as well.
“Came in for the reds, basically we had one lap, and the #14’s out lap was just so slow. We didn’t really get any temperature into the tyre until we were halfway through the run, so maybe I should’ve held back a bit further.
“I thought he was going to go with such a big gap to the #15 [Graham Rahal] in front of him.
“Ultimately, we’re talking about missing it by less than a tenth which is frustrating because the car felt comfortable and had more speed in it. Unfortunately we needed another half lap or a lap.”
Firestone has brought a new more grippy compound of alternate tires to Laguna Seca this year, and the abrasive surface is causing drivers struggles to make them last longer than two hot laps. But Dixon says this may work in his favour as he attempts to make progress through the field.
Asked by NBC how he plans to move forward from 13th on the grid, he replied: “I think strategy was always going to be key for this one, especially with how bad the red tyre is. Even the black, for that matter, is going to be a struggle to do a full stint on those.
“It’s a very slippery, low-grip track, and that’s going to play into more cautions and the factor of flipping a strategy. You’re probably going to have to do a four-stopper.
“We’ll see what happens, everything’s to play for. This year might be a bit different from a typical Monterey.”
Palou to get engine penalty
Meanwhile, Dixon's team-mate Alex Palou will be relegated from fifth on the grid to 11th by an engine change penalty.
That will make Marcus Ericsson, who qualified 10th, the highest-placed of the Ganassi cars in the field.
Palou has pledged to help his team-mates try to claim a 15th championship for the Ganassi team, despite his legal dispute with the squad, and the fact that he intends this to be his last race with CGR before switching to Arrow McLaren SP.
Ericsson is 39 points back from Power, fourth in the standings.
