The Briton, who also won the event on two wheels in 2017, has now failed to finish the endurance rally six times out of 10 starts.
The 33-year-old GasGas rider was 10th fastest in Saturday's prologue and fastest at the first checkpoint before falling at the 52km mark in the 368km special stage inland and along the shores of the Red Sea.
Suffering from back pain, he was flown to Yanbu for medical attention.
American Ricky Brabec took his ninth career stage win to lead the motorcycle standings with compatriot Mason Klein denied a first victory after being penalised for speeding.
Honda rider Brabec was 19 seconds clear of Argentina's Kevin Benavides on a KTM with Australian Toby Price third.
In the car category, Spaniard Carlos Sainz took his 42nd career stage win to lead for Audi - 10 seconds clear of France's nine-times world rally champion Sebastien Loeb for the Bahrain Raid Xtreme team.
The 45th edition of the Dakar is held entirely in Saudi Arabia for the fourth time and ends in Dammam on the Gulf coast on January 15th.
