diff --git a/HISTORY.rst b/HISTORY.rst
index a883ae57..11b89dac 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -15,6 +15,7 @@ PlatformIO Core 5
 - Fixed an issue when using a custom git/ssh package with `platform_packages <https://docs.platformio.org/page/projectconf/section_env_platform.html#platform-packages>`__ option (`issue #3624 <https://github.com/platformio/platformio-core/issues/3624>`_)
 - Fixed an issue with "ImportError: cannot import name '_get_backend' from 'cryptography.hazmat.backends'" when using `Remote Development <https://docs.platformio.org/page/plus/pio-remote.html>`__ on RaspberryPi device (`issue #3652 <https://github.com/platformio/platformio-core/issues/3652>`_)
 - Fixed an issue when `pio package unpublish <https://docs.platformio.org/page/core/userguide/package/cmd_unpublish.html>`__ command crashes (`issue #3660 <https://github.com/platformio/platformio-core/issues/3660>`_)
+- Fixed an issue when the package manager tries to install a built-in library from the registry (`issue #3662 <https://github.com/platformio/platformio-core/issues/3662>`_)
 
 5.0.0 (2020-09-03)
 ~~~~~~~~~~~~~~~~~~
diff --git a/platformio/commands/lib/command.py b/platformio/commands/lib/command.py
index 543e439c..d49e6cb6 100644
--- a/platformio/commands/lib/command.py
+++ b/platformio/commands/lib/command.py
@@ -22,11 +22,7 @@ from tabulate import tabulate
 
 from platformio import exception, fs, util
 from platformio.commands import PlatformioCLI
-from platformio.commands.lib.helpers import (
-    get_builtin_libs,
-    is_builtin_lib,
-    save_project_libdeps,
-)
+from platformio.commands.lib.helpers import get_builtin_libs, save_project_libdeps
 from platformio.compat import dump_json_to_unicode
 from platformio.package.exception import NotGlobalLibDir, UnknownPackageError
 from platformio.package.manager.library import LibraryPackageManager
@@ -164,15 +160,8 @@ def lib_install(  # pylint: disable=too-many-arguments,unused-argument
             }
 
         elif storage_dir in storage_libdeps:
-            builtin_lib_storages = None
             for library in storage_libdeps[storage_dir]:
-                try:
-                    lm.install(library, silent=silent, force=force)
-                except UnknownPackageError as e:
-                    if builtin_lib_storages is None:
-                        builtin_lib_storages = get_builtin_libs()
-                    if not silent or not is_builtin_lib(builtin_lib_storages, library):
-                        click.secho("Warning! %s" % e, fg="yellow")
+                lm.install(library, silent=silent, force=force)
 
     if save and installed_pkgs:
         _save_deps(ctx, installed_pkgs)
diff --git a/platformio/commands/lib/helpers.py b/platformio/commands/lib/helpers.py
index 7a156e0f..732604a3 100644
--- a/platformio/commands/lib/helpers.py
+++ b/platformio/commands/lib/helpers.py
@@ -45,10 +45,11 @@ def get_builtin_libs(storage_names=None):
     return items
 
 
-def is_builtin_lib(storages, name):
-    for storage in storages or []:
-        if any(lib.get("name") == name for lib in storage["items"]):
-            return True
+def is_builtin_lib(name, storages=None):
+    for storage in storages or get_builtin_libs():
+        for lib in storage["items"]:
+            if lib.get("name") == name:
+                return True
     return False
 
 
diff --git a/platformio/package/manager/library.py b/platformio/package/manager/library.py
index a6656f4e..418774de 100644
--- a/platformio/package/manager/library.py
+++ b/platformio/package/manager/library.py
@@ -15,7 +15,10 @@
 import json
 import os
 
-from platformio.package.exception import MissingPackageManifestError
+from platformio.package.exception import (
+    MissingPackageManifestError,
+    UnknownPackageError,
+)
 from platformio.package.manager.base import BasePackageManager
 from platformio.package.meta import PackageItem, PackageSpec, PackageType
 from platformio.project.helpers import get_project_global_lib_dir
@@ -63,6 +66,33 @@ class LibraryPackageManager(BasePackageManager):  # pylint: disable=too-many-anc
                 return root
         return path
 
+    def _install(  # pylint: disable=too-many-arguments
+        self,
+        spec,
+        search_filters=None,
+        silent=False,
+        skip_dependencies=False,
+        force=False,
+    ):
+        try:
+            return super(LibraryPackageManager, self)._install(
+                spec,
+                search_filters=search_filters,
+                silent=silent,
+                skip_dependencies=skip_dependencies,
+                force=force,
+            )
+        except UnknownPackageError as e:
+            # pylint: disable=import-outside-toplevel
+            from platformio.commands.lib.helpers import is_builtin_lib
+
+            spec = self.ensure_spec(spec)
+            if is_builtin_lib(spec.name):
+                self.print_message("Already installed, built-in library", fg="yellow")
+                return True
+
+            raise e
+
     def install_dependencies(self, pkg, silent=False):
         assert isinstance(pkg, PackageItem)
         manifest = self.load_manifest(pkg)