diff --git a/homeassistant/components/pyload/sensor.py b/homeassistant/components/pyload/sensor.py
index c21e74b18a7..730f0202d5b 100644
--- a/homeassistant/components/pyload/sensor.py
+++ b/homeassistant/components/pyload/sensor.py
@@ -33,7 +33,6 @@ from homeassistant.helpers.aiohttp_client import async_create_clientsession
 import homeassistant.helpers.config_validation as cv
 from homeassistant.helpers.entity_platform import AddEntitiesCallback
 from homeassistant.helpers.typing import ConfigType, DiscoveryInfoType
-from homeassistant.helpers.update_coordinator import UpdateFailed
 
 from .const import DEFAULT_HOST, DEFAULT_NAME, DEFAULT_PORT
 
@@ -132,20 +131,24 @@ class PyLoadSensor(SensorEntity):
             _LOGGER.info("Authentication failed, trying to reauthenticate")
             try:
                 await self.api.login()
-            except InvalidAuth as e:
-                raise PlatformNotReady(
-                    f"Authentication failed for {self.api.username}, check your login credentials"
-                ) from e
-            else:
-                raise UpdateFailed(
-                    "Unable to retrieve data due to cookie expiration but re-authentication was successful."
+            except InvalidAuth:
+                _LOGGER.error(
+                    "Authentication failed for %s, check your login credentials",
+                    self.api.username,
                 )
-        except CannotConnect as e:
-            raise UpdateFailed(
-                "Unable to connect and retrieve data from pyLoad API"
-            ) from e
-        except ParserError as e:
-            raise UpdateFailed("Unable to parse data from pyLoad API") from e
+                return
+            else:
+                _LOGGER.info(
+                    "Unable to retrieve data due to cookie expiration "
+                    "but re-authentication was successful"
+                )
+                return
+        except CannotConnect:
+            _LOGGER.debug("Unable to connect and retrieve data from pyLoad API")
+            return
+        except ParserError:
+            _LOGGER.error("Unable to parse data from pyLoad API")
+            return
 
         value = getattr(self.data, self.type)
 
diff --git a/tests/components/pyload/test_sensor.py b/tests/components/pyload/test_sensor.py
index 54f15deb313..6fd85ba0796 100644
--- a/tests/components/pyload/test_sensor.py
+++ b/tests/components/pyload/test_sensor.py
@@ -2,15 +2,19 @@
 
 from unittest.mock import AsyncMock
 
+from freezegun.api import FrozenDateTimeFactory
 from pyloadapi.exceptions import CannotConnect, InvalidAuth, ParserError
 import pytest
 from syrupy.assertion import SnapshotAssertion
 
+from homeassistant.components.pyload.sensor import SCAN_INTERVAL
 from homeassistant.components.sensor import DOMAIN
 from homeassistant.core import HomeAssistant
 from homeassistant.helpers.typing import ConfigType
 from homeassistant.setup import async_setup_component
 
+from tests.common import async_fire_time_changed
+
 
 @pytest.mark.usefixtures("mock_pyloadapi")
 async def test_setup(
@@ -60,9 +64,9 @@ async def test_setup_exceptions(
 @pytest.mark.parametrize(
     ("exception", "expected_exception"),
     [
-        (CannotConnect, "UpdateFailed"),
-        (ParserError, "UpdateFailed"),
-        (InvalidAuth, "UpdateFailed"),
+        (CannotConnect, "Unable to connect and retrieve data from pyLoad API"),
+        (ParserError, "Unable to parse data from pyLoad API"),
+        (InvalidAuth, "Authentication failed, trying to reauthenticate"),
     ],
 )
 async def test_sensor_update_exceptions(
@@ -80,5 +84,31 @@ async def test_sensor_update_exceptions(
     assert await async_setup_component(hass, DOMAIN, pyload_config)
     await hass.async_block_till_done()
 
-    assert len(hass.states.async_all(DOMAIN)) == 0
+    assert len(hass.states.async_all(DOMAIN)) == 1
     assert expected_exception in caplog.text
+
+
+async def test_sensor_invalid_auth(
+    hass: HomeAssistant,
+    pyload_config: ConfigType,
+    mock_pyloadapi: AsyncMock,
+    caplog: pytest.LogCaptureFixture,
+    freezer: FrozenDateTimeFactory,
+) -> None:
+    """Test invalid auth during sensor update."""
+
+    assert await async_setup_component(hass, DOMAIN, pyload_config)
+    await hass.async_block_till_done()
+    assert len(hass.states.async_all(DOMAIN)) == 1
+
+    mock_pyloadapi.get_status.side_effect = InvalidAuth
+    mock_pyloadapi.login.side_effect = InvalidAuth
+
+    freezer.tick(SCAN_INTERVAL)
+    async_fire_time_changed(hass)
+    await hass.async_block_till_done()
+
+    assert (
+        "Authentication failed for username, check your login credentials"
+        in caplog.text
+    )