diff --git a/cmd/main.go b/cmd/main.go
index 5bb4890c..18d93c3f 100644
--- a/cmd/main.go
+++ b/cmd/main.go
@@ -273,7 +273,7 @@ func setupControllers(mgr manager.Manager, flags flagVars, linodeClientConfig, d
 
 	useGzip, err := strconv.ParseBool(os.Getenv("GZIP_COMPRESSION_ENABLED"))
 	if err != nil {
-		setupLog.Error(err, "proceeding without gzip compression for cloud-init data")
+		setupLog.Error(err, "proceeding without gzip compression for user-data")
 	}
 
 	// LinodeMachine Controller
diff --git a/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/chainsaw-test.yaml b/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/chainsaw-test.yaml
index 8bdb3d0f..b3ed35a6 100755
--- a/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/chainsaw-test.yaml
+++ b/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/chainsaw-test.yaml
@@ -23,6 +23,11 @@ spec:
       try:
         - assert:
             file: assert-capi-resources.yaml
+    - name: Modify existing CAPI deployment to use GZIP user-data
+      try:
+        # TODO: Add operation check
+        - patch:
+            file: patch-capl-controller-manager.yaml
     - name: Upload Flatcar image
       try:
         - script:
@@ -37,10 +42,10 @@ spec:
                 value: (env('LINODE_REGION'))
             content: |
               set -e
-              # Get the latest version on Beta channel.
-              # NOTE: This can be changed to Stable when Akamai support will come on these channels.
+              # Get the latest version on Alpha channel.
+              # NOTE: This can be changed to Beta when Ignition GZIP support for Akamai will come on these channels.
               curl -fsSL --remote-name \
-                https://beta.release.flatcar-linux.net/amd64-usr/current/flatcar_production_akamai_image.bin.gz
+                https://alpha.release.flatcar-linux.net/amd64-usr/current/flatcar_production_akamai_image.bin.gz
 
               res=$(curl -s --request POST \
                 --url "https://${TARGET_API}/${TARGET_API_VERSION}/${URI}" \
diff --git a/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/patch-capl-controller-manager.yaml b/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/patch-capl-controller-manager.yaml
new file mode 100644
index 00000000..7b9d0c5f
--- /dev/null
+++ b/e2e/capl-cluster-flavors/kubeadm-flatcar-vpcless-capl-cluster/patch-capl-controller-manager.yaml
@@ -0,0 +1,13 @@
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: capl-controller-manager
+  namespace: capl-system
+spec:
+  template:
+    spec:
+      containers:
+        - name: manager
+          env:
+          - name: GZIP_COMPRESSION_ENABLED
+            value: "true"