diff --git a/docs/local_dev.md b/docs/local_dev.md
index ca5331904..e93ee753c 100644
--- a/docs/local_dev.md
+++ b/docs/local_dev.md
@@ -135,6 +135,7 @@ export KUBERNETES_VERSION="v1.22.3"
 export CONTROL_PLANE_MACHINE_COUNT=1
 export WORKER_MACHINE_COUNT=1
 export CONTROL_PLANE_ENDPOINT_IP=<static IP from the subnet where the containers are running>
+export BUNDLE_LOOKUP_TAG=<bundle tag>
 ```
 
 From ```cluster-api-provider-bringyourownhost``` folder
diff --git a/test/e2e/config/provider.yaml b/test/e2e/config/provider.yaml
index 7e8db9ebd..e44e99a17 100644
--- a/test/e2e/config/provider.yaml
+++ b/test/e2e/config/provider.yaml
@@ -95,6 +95,7 @@ variables:
   NODE_DRAIN_TIMEOUT: "60s"
   # NOTE: INIT_WITH_BINARY is used only by the clusterctl upgrade test to initialize the management cluster to be upgraded
   INIT_WITH_BINARY: "https://github.com/kubernetes-sigs/cluster-api/releases/download/v1.0.0/clusterctl-{OS}-{ARCH}"
+  BUNDLE_LOOKUP_TAG: "v0.1.0_alpha.2"
 
 intervals:
   default/wait-controllers: ["3m", "10s"]
diff --git a/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-template.yaml b/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-template.yaml
index 3e3c4a307..1283c619a 100644
--- a/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-template.yaml
+++ b/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-template.yaml
@@ -184,7 +184,7 @@ metadata:
   name: ${CLUSTER_NAME}
 spec:
   bundleLookupBaseRegistry: projects.registry.vmware.com/cluster_api_provider_bringyourownhost
-  bundleLookupTag: v0.1.0_alpha.2
+  bundleLookupTag: ${BUNDLE_LOOKUP_TAG}
   controlPlaneEndpoint:
     host: ${CONTROL_PLANE_ENDPOINT_IP}
     port: 6443
diff --git a/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-with-kcp.yaml b/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-with-kcp.yaml
index 02e70b7e7..aae48f430 100644
--- a/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-with-kcp.yaml
+++ b/test/e2e/data/infrastructure-provider-byoh/v1beta1/cluster-with-kcp.yaml
@@ -28,7 +28,7 @@ metadata:
   name: ${CLUSTER_NAME}
 spec:
   bundleLookupBaseRegistry: projects.registry.vmware.com/cluster_api_provider_bringyourownhost
-  bundleLookupTag: v0.1.0_alpha.2
+  bundleLookupTag: ${BUNDLE_LOOKUP_TAG}
   controlPlaneEndpoint:
     host: ${CONTROL_PLANE_ENDPOINT_IP}
     port: 6443