diff --git a/homeassistant/components/shelly/sensor.py b/homeassistant/components/shelly/sensor.py
index 5d29aae8d5e..81dc2ef1c11 100644
--- a/homeassistant/components/shelly/sensor.py
+++ b/homeassistant/components/shelly/sensor.py
@@ -1,4 +1,6 @@
 """Sensor for Shelly."""
+import logging
+
 from homeassistant.components import sensor
 from homeassistant.const import (
     CONCENTRATION_PARTS_PER_MILLION,
@@ -12,7 +14,8 @@ from homeassistant.const import (
     VOLT,
 )
 
-from .const import SHAIR_MAX_WORK_HOURS
+from . import ShellyDeviceWrapper, get_device_name
+from .const import DATA_CONFIG_ENTRY, DOMAIN, REST, SHAIR_MAX_WORK_HOURS
 from .entity import (
     BlockAttributeDescription,
     RestAttributeDescription,
@@ -21,12 +24,17 @@ from .entity import (
     async_setup_entry_attribute_entities,
     async_setup_entry_rest,
 )
-from .utils import temperature_unit
+from .utils import async_remove_entity_by_domain, temperature_unit
 
-SENSORS = {
+_LOGGER = logging.getLogger(__name__)
+
+BATTERY_SENSOR = {
     ("device", "battery"): BlockAttributeDescription(
         name="Battery", unit=PERCENTAGE, device_class=sensor.DEVICE_CLASS_BATTERY
     ),
+}
+
+SENSORS = {
     ("device", "deviceTemp"): BlockAttributeDescription(
         name="Device Temperature",
         unit=temperature_unit,
@@ -175,6 +183,28 @@ REST_SENSORS = {
 
 async def async_setup_entry(hass, config_entry, async_add_entities):
     """Set up sensors for device."""
+
+    wrapper: ShellyDeviceWrapper = hass.data[DOMAIN][DATA_CONFIG_ENTRY][
+        config_entry.entry_id
+    ][REST]
+
+    if (
+        "external_power" in wrapper.device.settings
+        and wrapper.device.settings["external_power"] == 1
+    ):
+        _LOGGER.debug(
+            "Removed battery sensor [externally powered] for %s",
+            get_device_name(wrapper.device),
+        )
+        unique_id = f'{wrapper.device.shelly["mac"]}-battery'
+        await async_remove_entity_by_domain(
+            hass, "sensor", unique_id, config_entry.entry_id
+        )
+    else:
+        await async_setup_entry_attribute_entities(
+            hass, config_entry, async_add_entities, BATTERY_SENSOR, ShellySensor
+        )
+
     await async_setup_entry_attribute_entities(
         hass, config_entry, async_add_entities, SENSORS, ShellySensor
     )