diff --git a/Makefile b/Makefile
index 2ffe72323a..c74e0db6a7 100644
--- a/Makefile
+++ b/Makefile
@@ -303,6 +303,7 @@ cluster-e2e-templates-v1beta1: $(KUSTOMIZE) ## Generate cluster templates for v1
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-remediation --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-remediation.yaml
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-scale-in --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-scale-in.yaml
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-csi --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-csi.yaml
+	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-failure-domains --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-failure-domains.yaml
 
 cluster-e2e-templates-no-kubeproxy: $(KUSTOMIZE) ##Generate cluster templates without kubeproxy
 	# v1alpha4
@@ -321,6 +322,7 @@ cluster-e2e-templates-no-kubeproxy: $(KUSTOMIZE) ##Generate cluster templates wi
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/no-kubeproxy/cluster-template-kcp-remediation --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-remediation.yaml
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/no-kubeproxy/cluster-template-kcp-scale-in --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-kcp-scale-in.yaml
 	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/no-kubeproxy/cluster-template-csi --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-csi.yaml
+	$(KUSTOMIZE) build $(NUTANIX_E2E_TEMPLATES)/v1beta1/no-kubeproxy/cluster-template-failure-domains --load-restrictor LoadRestrictionsNone > $(NUTANIX_E2E_TEMPLATES)/v1beta1/cluster-template-failure-domains.yaml
 
 cluster-templates: $(KUSTOMIZE) ## Generate cluster templates for all flavors
 	$(KUSTOMIZE) build $(TEMPLATES_DIR)/base > $(TEMPLATES_DIR)/cluster-template.yaml
diff --git a/test/e2e/failure_domains_test.go b/test/e2e/failure_domains_test.go
index b3803cb569..107d37676b 100644
--- a/test/e2e/failure_domains_test.go
+++ b/test/e2e/failure_domains_test.go
@@ -38,6 +38,10 @@ const (
 )
 
 // Note: Still has "only-for-validation" label.
+// Tests if:
+//   - the control plane nodes are spread across the defined failure domains
+//   - the VMs are deployed on the correct Prism Element cluster and subnet
+//   - the correct failure domain conditions are applied to the nutanixCluster object
 var _ = Describe("Nutanix failure domains", Label("capx-feature-test", "failure-domains", "only-for-validation", "slow", "network"), func() {
 	const specName = "failure-domains"