diff --git a/homeassistant/components/powerwall/__init__.py b/homeassistant/components/powerwall/__init__.py
index af75ace8bd4..31e249ec806 100644
--- a/homeassistant/components/powerwall/__init__.py
+++ b/homeassistant/components/powerwall/__init__.py
@@ -29,7 +29,6 @@ from .const import (
     POWERWALL_API_CHANGED,
     POWERWALL_COORDINATOR,
     POWERWALL_HTTP_SESSION,
-    POWERWALL_LOGIN_FAILED_COUNT,
     UPDATE_INTERVAL,
 )
 from .models import PowerwallBaseInfo, PowerwallData, PowerwallRuntimeData
@@ -40,8 +39,6 @@ PLATFORMS = [Platform.BINARY_SENSOR, Platform.SENSOR]
 
 _LOGGER = logging.getLogger(__name__)
 
-MAX_LOGIN_FAILURES = 5
-
 API_CHANGED_ERROR_BODY = (
     "It seems like your powerwall uses an unsupported version. "
     "Please update the software of your powerwall or if it is "
@@ -68,29 +65,15 @@ class PowerwallDataManager:
         self.runtime_data = runtime_data
         self.power_wall = power_wall
 
-    @property
-    def login_failed_count(self) -> int:
-        """Return the current number of failed logins."""
-        return self.runtime_data[POWERWALL_LOGIN_FAILED_COUNT]
-
     @property
     def api_changed(self) -> int:
         """Return true if the api has changed out from under us."""
         return self.runtime_data[POWERWALL_API_CHANGED]
 
-    def _increment_failed_logins(self) -> None:
-        self.runtime_data[POWERWALL_LOGIN_FAILED_COUNT] += 1
-
-    def _clear_failed_logins(self) -> None:
-        self.runtime_data[POWERWALL_LOGIN_FAILED_COUNT] = 0
-
     def _recreate_powerwall_login(self) -> None:
         """Recreate the login on auth failure."""
-        http_session = self.runtime_data[POWERWALL_HTTP_SESSION]
-        http_session.close()
-        http_session = requests.Session()
-        self.runtime_data[POWERWALL_HTTP_SESSION] = http_session
-        self.power_wall = Powerwall(self.ip_address, http_session=http_session)
+        if self.power_wall.is_authenticated():
+            self.power_wall.logout()
         self.power_wall.login(self.password or "")
 
     async def async_update_data(self) -> PowerwallData:
@@ -121,17 +104,15 @@ class PowerwallDataManager:
                 raise UpdateFailed("The powerwall api has changed") from err
             except AccessDeniedError as err:
                 if attempt == 1:
-                    self._increment_failed_logins()
+                    # failed to authenticate => the credentials must be wrong
                     raise ConfigEntryAuthFailed from err
                 if self.password is None:
                     raise ConfigEntryAuthFailed from err
-                raise UpdateFailed(
-                    f"Login attempt {self.login_failed_count}/{MAX_LOGIN_FAILURES} failed, will retry: {err}"
-                ) from err
+                _LOGGER.debug("Access denied, trying to reauthenticate")
+                # there is still an attempt left to authenticate, so we continue in the loop
             except APIError as err:
                 raise UpdateFailed(f"Updated failed due to {err}, will retry") from err
             else:
-                self._clear_failed_logins()
                 return data
         raise RuntimeError("unreachable")
 
@@ -174,7 +155,6 @@ async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
         api_changed=False,
         base_info=base_info,
         http_session=http_session,
-        login_failed_count=0,
         coordinator=None,
     )
 
diff --git a/homeassistant/components/powerwall/const.py b/homeassistant/components/powerwall/const.py
index b1791c4300e..9df710e2df4 100644
--- a/homeassistant/components/powerwall/const.py
+++ b/homeassistant/components/powerwall/const.py
@@ -7,7 +7,6 @@ POWERWALL_BASE_INFO: Final = "base_info"
 POWERWALL_COORDINATOR: Final = "coordinator"
 POWERWALL_API_CHANGED: Final = "api_changed"
 POWERWALL_HTTP_SESSION: Final = "http_session"
-POWERWALL_LOGIN_FAILED_COUNT: Final = "login_failed_count"
 
 UPDATE_INTERVAL = 30
 
diff --git a/homeassistant/components/powerwall/models.py b/homeassistant/components/powerwall/models.py
index 6f8ccb98459..522dc2806bf 100644
--- a/homeassistant/components/powerwall/models.py
+++ b/homeassistant/components/powerwall/models.py
@@ -45,7 +45,6 @@ class PowerwallRuntimeData(TypedDict):
     """Run time data for the powerwall."""
 
     coordinator: DataUpdateCoordinator | None
-    login_failed_count: int
     base_info: PowerwallBaseInfo
     api_changed: bool
     http_session: Session
diff --git a/tests/components/powerwall/test_init.py b/tests/components/powerwall/test_init.py
new file mode 100644
index 00000000000..d5fa92fc23f
--- /dev/null
+++ b/tests/components/powerwall/test_init.py
@@ -0,0 +1,66 @@
+"""Tests for the PowerwallDataManager."""
+
+import datetime
+from unittest.mock import MagicMock, patch
+
+from tesla_powerwall import AccessDeniedError, LoginResponse
+
+from homeassistant.components.powerwall.const import DOMAIN
+from homeassistant.config_entries import ConfigEntryState
+from homeassistant.const import CONF_IP_ADDRESS, CONF_PASSWORD
+from homeassistant.core import HomeAssistant
+from homeassistant.util.dt import utcnow
+
+from .mocks import _mock_powerwall_with_fixtures
+
+from tests.common import MockConfigEntry, async_fire_time_changed
+
+
+async def test_update_data_reauthenticate_on_access_denied(hass: HomeAssistant):
+    """Test if _update_data of PowerwallDataManager reauthenticates on AccessDeniedError."""
+
+    mock_powerwall = await _mock_powerwall_with_fixtures(hass)
+    # login responses for the different tests:
+    # 1. login success on entry setup
+    # 2. login success after reauthentication
+    # 3. login failure after reauthentication
+    mock_powerwall.login = MagicMock(name="login", return_value=LoginResponse({}))
+    mock_powerwall.get_charge = MagicMock(name="get_charge", return_value=90.0)
+    mock_powerwall.is_authenticated = MagicMock(
+        name="is_authenticated", return_value=True
+    )
+    mock_powerwall.logout = MagicMock(name="logout")
+
+    config_entry = MockConfigEntry(
+        domain=DOMAIN, data={CONF_IP_ADDRESS: "1.2.3.4", CONF_PASSWORD: "password"}
+    )
+    config_entry.add_to_hass(hass)
+    with patch(
+        "homeassistant.components.powerwall.config_flow.Powerwall",
+        return_value=mock_powerwall,
+    ), patch(
+        "homeassistant.components.powerwall.Powerwall", return_value=mock_powerwall
+    ):
+        assert await hass.config_entries.async_setup(config_entry.entry_id)
+        await hass.async_block_till_done()
+
+        mock_powerwall.login.reset_mock(return_value=True)
+        mock_powerwall.get_charge.side_effect = [AccessDeniedError("test"), 90.0]
+
+        async_fire_time_changed(hass, utcnow() + datetime.timedelta(minutes=1))
+        await hass.async_block_till_done()
+        flows = hass.config_entries.flow.async_progress(DOMAIN)
+        assert len(flows) == 0
+
+        mock_powerwall.login.reset_mock()
+        mock_powerwall.login.side_effect = AccessDeniedError("test")
+        mock_powerwall.get_charge.side_effect = [AccessDeniedError("test"), 90.0]
+
+        async_fire_time_changed(hass, utcnow() + datetime.timedelta(minutes=1))
+        await hass.async_block_till_done()
+        assert config_entry.state == ConfigEntryState.LOADED
+
+        flows = hass.config_entries.flow.async_progress(DOMAIN)
+        assert len(flows) == 1
+        reauth_flow = flows[0]
+        assert reauth_flow["context"]["source"] == "reauth"