Briton Andy Lapthorne lost 6-4 6-4 to world number three Dylan Alcott in the first of his three quad singles round-robin matches at the Australian Open.
Lapthorne, 24, now faces South African Lucas Sithole and American David Wagner with the top two contesting the final.
Elsewhere, Britain's Gordon Reid and Jordanne Whiley bowed out of the men's and women's singles on the first day of the wheelchair tennis competition.
All three will begin their doubles campaigns on Thursday.
US Open champions Lapthorne said: "I gave it my best today, but Dylan was stronger on the day."
He won the Melbourne Open singles title on Sunday after Alcott withdrew from the final.
Lapthorne will be looking for his fourth Australian Open doubles title when he partners Wagner, and Whiley is defending her women's doubles title with partner Yui Kamiji of Japan.