While his new team-mate Daniel Ricciardo qualified second in Melbourne, reigning Formula 1 world champion Vettel will start only 13th.
Renault confirmed a software issue meant Vettel suffered from a lack of power, and the German said the issue had been present since the morning practice session.
"This morning was still OK but definitely a step down, and then this afternoon when it started to rain I was struggling a lot with driveability and it made my life pretty difficult," said Vettel.
"I made it round, but I struggled a lot when going on the power, so driveability was down.
"We programmed it to be like yesterday, if not a little bit better.
"There was a different set-up and a software update, but with modern Formula 1 there's a lot of software programming and it's not easy for drivers to understand what's going on."
Why Red Bull is back in the game
Although Red Bull's Australian GP has been generally encouraging after its difficult winter, Vettel suspects reliability will still be a challenge on race day.
"We still haven't done a race simulation or a race distance in one go," he said.
"I think we have improved reliability compared to testing because we're able to put parts on the car with zero mileage. But there's still a long way to go.
"The biggest relief yesterday was the performance, but we know that on reliability there are still things to do.
"We're both trying to see the chequered flag and we know the car's quick, so we want to finish as high up as possible, but priority number one is to finish the race."
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