The Brit now sits 16th on GC, five minutes and 51 seconds behind the Sky co-leader.
Yates' explosion came without warning, Mitchelton-Scott director Matt White said.
"Adam has had a bad period on the final climb and went from being in a very good place to really struggling when the pressure went down. (He) was comfortable in the group but without any indication it was coming, he didn’t have anything left."
The next 24 hours is crucial to defining the team's objectives going forward, an optimistic White said.
"If Adam pulls up well tomorrow, and can be competitive on the final day in the Alps then the GC is still on the cards, if not we will re-assess and refocus our objectives.”
Earlier, the Australian registered team played the tactical game almost perfectly, with both Damien Howson and Mikel Nieve down the road for a potential bridging by Yates later in the stage. As the huge lead group began to split, Howson was called back while Nieve was allowed free rein for the stage win.
But adding insult to injury, Nieve, who looked set to raise his arms up in the air in celebration, was gunned down by Team Sky's Geraint Thomas in the final few hundred metres on his way to pulling on the yellow jersey. The Spaniard settled for fifth behind a fast approaching Tom Dumoulin (Sunweb), Chris Froome (Sky), and Damiano Caruso (BMC) and was understandably disappointed.
