diff --git a/api/v1beta1/gcpmachine_types.go b/api/v1beta1/gcpmachine_types.go
index 7e27e7845..c501d1faf 100644
--- a/api/v1beta1/gcpmachine_types.go
+++ b/api/v1beta1/gcpmachine_types.go
@@ -216,6 +216,12 @@ type CustomerEncryptionKey struct {
 	// +optional
 	SuppliedKey *SuppliedKey `json:"suppliedKey,omitempty"`
 }
+type ProvisioningModel string
+
+const (
+	ProvisioningModelStandard ProvisioningModel = "Standard"
+	ProvisioningModelSpot     ProvisioningModel = "Spot"
+)
 
 // GCPMachineSpec defines the desired state of GCPMachine.
 type GCPMachineSpec struct {
@@ -302,6 +308,14 @@ type GCPMachineSpec struct {
 	// +optional
 	Preemptible bool `json:"preemptible,omitempty"`
 
+	// ProvisioningModel defines if instance is spot.
+	// If set to "Standard" while preemptible is true, then the VM will be of type "Preemptible".
+	// If "Spot", VM type is "Spot".
+	// +kubebuilder:validation:Enum=Standard;Spot
+	// +kubebuilder:default=Standard
+	// +optional
+	ProvisioningModel *ProvisioningModel `json:"provisioningModel,omitempty"`
+
 	// IPForwarding Allows this instance to send and receive packets with non-matching destination or source IPs.
 	// This is required if you plan to use this instance to forward routes. Defaults to enabled.
 	// +kubebuilder:validation:Enum=Enabled;Disabled
diff --git a/cloud/scope/machine.go b/cloud/scope/machine.go
index 96f745822..51fad6eff 100644
--- a/cloud/scope/machine.go
+++ b/cloud/scope/machine.go
@@ -402,6 +402,9 @@ func (m *MachineScope) InstanceSpec(log logr.Logger) *compute.Instance {
 			Preemptible: m.GCPMachine.Spec.Preemptible,
 		},
 	}
+	if m.GCPMachine.Spec.ProvisioningModel != nil && *m.GCPMachine.Spec.ProvisioningModel == infrav1.ProvisioningModelSpot {
+		instance.Scheduling.ProvisioningModel = "SPOT"
+	}
 
 	instance.CanIpForward = true
 	if m.GCPMachine.Spec.IPForwarding != nil && *m.GCPMachine.Spec.IPForwarding == infrav1.IPForwardingDisabled {
diff --git a/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachines.yaml b/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachines.yaml
index 24955802d..a070ad5ca 100644
--- a/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachines.yaml
+++ b/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachines.yaml
@@ -231,6 +231,16 @@ spec:
               preemptible:
                 description: Preemptible defines if instance is preemptible
                 type: boolean
+              provisioningModel:
+                default: Standard
+                description: |-
+                  ProvisioningModel defines if instance is spot. 
+                  If set to "Standard" while preemptible is true, then the VM will be of type "Preemptible". 
+                  If "Spot", VM type is "Spot".
+                enum:
+                - Standard
+                - Spot
+                type: string
               providerID:
                 description: ProviderID is the unique identifier as specified by the
                   cloud provider.
diff --git a/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachinetemplates.yaml b/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachinetemplates.yaml
index 5cc470597..d78d196c1 100644
--- a/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachinetemplates.yaml
+++ b/config/crd/bases/infrastructure.cluster.x-k8s.io_gcpmachinetemplates.yaml
@@ -246,6 +246,16 @@ spec:
                       preemptible:
                         description: Preemptible defines if instance is preemptible
                         type: boolean
+                      provisioningModel:
+                        default: Standard
+                        description: |-
+                          ProvisioningModel defines if instance is spot. 
+                          If set to "Standard" while preemptible is true, then the VM will be of type "Preemptible". 
+                          If "Spot", VM type is "Spot".
+                        enum:
+                        - Standard
+                        - Spot
+                        type: string
                       providerID:
                         description: ProviderID is the unique identifier as specified
                           by the cloud provider.
diff --git a/docs/book/src/topics/preemptible-vms.md b/docs/book/src/topics/preemptible-vms.md
index b0e9636d9..ade417896 100644
--- a/docs/book/src/topics/preemptible-vms.md
+++ b/docs/book/src/topics/preemptible-vms.md
@@ -28,3 +28,25 @@ spec:
     vmSize: E2
     preemptible: true
 ```
+
+## Spot VMs
+[Spot VMs are the latest version of preemptible VMs.](https://cloud.google.com/compute/docs/instances/spot)
+
+To use a Spot VM instead of a Preemptible VM, add `provisioningModel` to `GCPMachineTemplate` and set it to `Spot`.
+
+```yaml
+apiVersion: infrastructure.cluster.x-k8s.io/v1beta1
+kind: GCPMachineTemplate
+metadata:
+  name: capg-md-0
+spec:
+  region: us-west-1
+  template:
+    osDisk:
+      diskSizeGB: 30
+      managedDisk:
+        storageAccountType: STANDARD
+      osType: Linux
+    vmSize: E2
+    provisioningModel: Spot
+```