Mercedes has struggled to get to grips with the all-new technical regulations with the eight-time consecutive constructors’ champions sitting as the third-fastest team behind Ferrari and Red Bull.
Explaining Hamilton’s Q1 exit, Shovlin said: “Well, there’s a few reasons but fundamentally, we don’t really understand the car yet as well as we do it at the end of the year, we’ve only had two races with it.
“So, we are always exploring the setup with Lewis, trying to find a direction that delivers performance and we’d found a good direction from Friday into Saturday that he was able to try in the third practice session.
“We went quite a bit further on that into the qualifying session, but ultimately it was a bit too far.
“So, from the word go, he was lacking rear grip, Jeddah is a street circuit that you need a lot of confidence, it’s very fast, the walls are very close and when you haven’t got the rear grip, the driver can’t have that confidence.”
Hamilton holds the record for the most pole positions scored in F1 with 103 to his name with Michael Schumacher second on 68.
With a better set up, George Russell was able to reach the final segment of qualifying and lined up sixth on the grid, qualifying 10 positions better than his record-breaking team-mate.
“Ultimately, we pushed it a bit too far but it was a useful learning exercise,” added Shovlin.
“Fundamentally though the problem right now is the car is not fast enough and unless we get it perfect, we are going to be at risk in those sessions.
“So, we need to make a quicker car as soon as possible.”