Christian Pulisic gave Chelsea the lead in the 30th minute at the Venue Bank of America Stadium in North Carolina.
But Charlotte FC, who were only formed in December 2019, were handed the opportunity to level the scores in the dying seconds of the game when Trevoh Chalobah was penalised for blocking a shot with his hand.
Daniel Rios stepped up and cooly dispatched the ball past Edouard Mendy, forcing a penalty shoot-out in the process.
Mendy was also unable to stop any of Charlotte's five penalties in the shoot-out as the American outfit secured the biggest victory in their short history.
Kai Havertz, Ben Chilwell and Raheem Sterling all netted a spot-kick for Chelsea, but Gallagher will have nightmares about his attempt from 12 yards.
The England international, 22, appeared to try a Panenka (we think) but got it horribly, horribly wrong.
Charlotte FC goalkeeper Pablo Sisniega stood still on his line as the ball rolled kindly into his hands.
Gallagher's attempt had no disguise and the ball barely got off the ground.
Watch Conor Gallagher's penalty here:
Speaking to the press after the match, as quoted by football.london, Tuchel has delivered his verdict on the penalty shoot-out defeat.
Discussing his team's performance, the German said: "In general, I would say we played a good first half but only 80 metres of the pitch.
"The last 20 metres were not good enough. We struggled with our decision making and precision in the last 20 metres. There were not enough chances, not enough clear chances.
"We allowed two big chances out of nothing, this was the point of the very first. Otherwise I thought we played a very good match.
"Second half it took us 30 minutes to show some quality and then it was maybe only for 10 minutes. So not good, not good at all."
The head coach continued to praise the performance of Sterling, who registered his first 45 minutes as a Chelsea player.
"I saw four accelerations in the second half I think and they all came from Raheem," he said.
"There is not need for major doubts or criticism, but it's never important what the manager has in his head ahead of pre-season."
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