diff --git a/Makefile b/Makefile
index 893ca1793c..aa2144b021 100644
--- a/Makefile
+++ b/Makefile
@@ -288,7 +288,7 @@ generate-doctoc:
 	TRACE=$(TRACE) ./hack/generate-doctoc.sh
 
 .PHONY: generate-e2e-templates
-generate-e2e-templates: ## Generate e2e cluster templates
+generate-e2e-templates: $(KUSTOMIZE) ## Generate e2e cluster templates
 	$(MAKE) release-flavors
 
 	cp $(RELEASE_DIR)/cluster-template.yaml $(E2E_TEMPLATE_DIR)/kustomization/base/cluster-template.yaml
diff --git a/packaging/flavorgen/flavors/generators.go b/packaging/flavorgen/flavors/generators.go
index 20e20fd595..9aee7d6d47 100644
--- a/packaging/flavorgen/flavors/generators.go
+++ b/packaging/flavorgen/flavors/generators.go
@@ -259,7 +259,7 @@ func newVSphereMachineTemplate(templateName string) infrav1.VSphereMachineTempla
 func defaultVirtualMachineSpec() infrav1.VSphereMachineSpec {
 	return infrav1.VSphereMachineSpec{
 		VirtualMachineCloneSpec: defaultVirtualMachineCloneSpec(),
-		PowerOffMode:            infrav1.VirtualMachinePowerOpModeHard,
+		PowerOffMode:            infrav1.VirtualMachinePowerOpModeTrySoft,
 	}
 }
 
@@ -312,7 +312,7 @@ func newNodeIPAMVSphereMachineTemplate(templateName string) infrav1.VSphereMachi
 func nodeIPAMVirtualMachineSpec() infrav1.VSphereMachineSpec {
 	return infrav1.VSphereMachineSpec{
 		VirtualMachineCloneSpec: nodeIPAMVirtualMachineCloneSpec(),
-		PowerOffMode:            infrav1.VirtualMachinePowerOpModeHard,
+		PowerOffMode:            infrav1.VirtualMachinePowerOpModeTrySoft,
 	}
 }
 
diff --git a/templates/cluster-template-external-loadbalancer.yaml b/templates/cluster-template-external-loadbalancer.yaml
index 675e0c9687..41447e49e9 100644
--- a/templates/cluster-template-external-loadbalancer.yaml
+++ b/templates/cluster-template-external-loadbalancer.yaml
@@ -55,7 +55,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
@@ -82,7 +82,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
diff --git a/templates/cluster-template-ignition.yaml b/templates/cluster-template-ignition.yaml
index 49da310908..aa4f47b5a2 100644
--- a/templates/cluster-template-ignition.yaml
+++ b/templates/cluster-template-ignition.yaml
@@ -55,7 +55,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
diff --git a/templates/cluster-template-node-ipam.yaml b/templates/cluster-template-node-ipam.yaml
index 3c441fc1cd..eee0318edd 100644
--- a/templates/cluster-template-node-ipam.yaml
+++ b/templates/cluster-template-node-ipam.yaml
@@ -60,7 +60,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
@@ -92,7 +92,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
diff --git a/templates/cluster-template.yaml b/templates/cluster-template.yaml
index d8fdad6e8e..b456690355 100644
--- a/templates/cluster-template.yaml
+++ b/templates/cluster-template.yaml
@@ -55,7 +55,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
@@ -82,7 +82,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
diff --git a/templates/clusterclass-template.yaml b/templates/clusterclass-template.yaml
index d2711cdd76..15b5cca25c 100644
--- a/templates/clusterclass-template.yaml
+++ b/templates/clusterclass-template.yaml
@@ -178,7 +178,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'
@@ -205,7 +205,7 @@ spec:
           networkName: '${VSPHERE_NETWORK}'
       numCPUs: 2
       os: Linux
-      powerOffMode: hard
+      powerOffMode: trySoft
       resourcePool: '${VSPHERE_RESOURCE_POOL}'
       server: '${VSPHERE_SERVER}'
       storagePolicyName: '${VSPHERE_STORAGE_POLICY}'