Dalton said while they have confidence in their boat, the reality of the fast-developing AC72 class is the crew are likely to encounter minor issues, similar to the battery failure which put them out of race two of the Louis Vuitton finals against Luna Rossa, at some point in the Cup match.
"These boats are so complicated and they're developing so fast, I've always felt we will lose races through issues," he said.
"And it if it happens it will be quite hard for the New Zealand public to get their head round, but it's something that so long as our processes are working and we're up as high as we think we can be in terms of reliability, we have to internally accept that we may have a few issues and not get too worried about."
Dalton believes Oracle will be in a similar position having struck a couple of problems with their boat during training last week. But with the finals series having been extended out to 17 races, or the first to nine wins, he said unless one team suffers a catastrophic incident the fastest boat and best team will still win the America's Cup.
Dalton's warnings to the public seem an abrupt turnaround from the message he was delivering heading into the regatta back in July, when he was at pains to emphasise their confidence in the reliability and performance of their boat amid concerns over the safety of the class.
Team New Zealand skipper Dean Barker, known for his cool, calm and collected manner at the helm, said his team won't be fazed if the encounter any problems with the boat.
"Inevitably when you go out for race one, everything breaks - I've had that experience before," he said.
"But this team is very well prepared to adapt and to make sure when we go out there for race one whatever is thrown at us everyone will be ready to go racing."