diff --git a/examples/custom_path/deployment.yaml b/examples/custom_path/deployment.yaml
deleted file mode 100644
index b18fc4d86..000000000
--- a/examples/custom_path/deployment.yaml
+++ /dev/null
@@ -1,40 +0,0 @@
-apiVersion: apps/v1
-kind: Deployment
-metadata:
-  name: local-path-rwx-example
-  labels:
-    app: local-path-rwx-example
-spec:
-  replicas: 2
-  selector:
-    matchLabels:
-      app: local-path-rwx-example
-  template:
-    metadata:
-      labels:
-        app: local-path-rwx-example
-    spec:
-      topologySpreadConstraints:
-      - maxSkew: 1
-        topologyKey: kubernetes.io/hostname
-        whenUnsatisfiable: DoNotSchedule
-        labelSelector:
-          matchLabels:
-            app: local-path-rwx-example
-      containers:
-      - name: pause
-        image: busybox
-        imagePullPolicy: IfNotPresent
-        command:
-        - /bin/sh
-        - -c
-        - 'hostname >> /data/shared.txt; sleep 3; cat /data/shared.txt; sleep infinity'
-        volumeMounts:
-        - name: volv
-          mountPath: /data
-        ports:
-        - containerPort: 80
-      volumes:
-      - name: volv
-        persistentVolumeClaim:
-          claimName: local-path-rwx-example
diff --git a/examples/custom_path/pvc.yaml b/examples/custom_path/pvc.yaml
deleted file mode 100644
index f2d18df4d..000000000
--- a/examples/custom_path/pvc.yaml
+++ /dev/null
@@ -1,21 +0,0 @@
-# Plesase note, configuration of the Local Path Provisioner should be set correspondingly
-# for this to work:
-#
-#  data:
-#    config.json: |-
-#      {
-#              "sharedFileSystemPath": "/shared/fs/mounted/on/the/same/path/on/all/nodes"
-#      }
-#
-apiVersion: v1
-kind: PersistentVolumeClaim
-metadata:
-  name: local-path-rwx-example
-spec:
-  accessModes:
-  - ReadWriteMany
-  resources:
-    requests:
-      storage: 1Gi
-  storageClassName: local-path
-  volumeMode: Filesystem
diff --git a/examples/pvc-with-custom-folder/kustomization.yaml b/examples/pvc-with-custom-folder/kustomization.yaml
new file mode 100644
index 000000000..7bfd4518a
--- /dev/null
+++ b/examples/pvc-with-custom-folder/kustomization.yaml
@@ -0,0 +1,4 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+resources:
+- pvc.yaml
diff --git a/examples/pvc-with-custom-folder/pvc.yaml b/examples/pvc-with-custom-folder/pvc.yaml
new file mode 100644
index 000000000..65c0e7921
--- /dev/null
+++ b/examples/pvc-with-custom-folder/pvc.yaml
@@ -0,0 +1,13 @@
+apiVersion: v1
+kind: PersistentVolumeClaim
+metadata:
+  name: custom-folder-pvc
+  annotations:
+    "rancher.io/customFolderName": "demo1"
+spec:
+  accessModes:
+    - ReadWriteOnce
+  storageClassName: local-path
+  resources:
+    requests:
+      storage: 128Mi
diff --git a/test/pod_test.go b/test/pod_test.go
index f7be8106a..8061b7553 100644
--- a/test/pod_test.go
+++ b/test/pod_test.go
@@ -1,3 +1,4 @@
+//go:build e2e
 // +build e2e
 
 package test
@@ -6,9 +7,9 @@ import (
 	"fmt"
 	"github.com/kelseyhightower/envconfig"
 	"github.com/stretchr/testify/suite"
+	"strings"
 	"testing"
 	"time"
-	"strings"
 )
 
 const (
@@ -131,6 +132,12 @@ func (p *PodTestSuite) TestPodWithSubpath() {
 	runTest(p, []string{p.config.IMAGE}, "ready", hostPathVolumeType)
 }
 
+func (p *PodTestSuite) TestPodWithCustomFolder() {
+	p.kustomizeDir = "pod-with-custom-folder"
+
+	runTest(p, []string{p.config.IMAGE}, "ready", hostPathVolumeType)
+}
+
 func runTest(p *PodTestSuite, images []string, waitCondition, volumeType string) {
 	kustomizeDir := testdataFile(p.kustomizeDir)
 
diff --git a/test/testdata/pod-with-custom-floder/kustomization.yaml b/test/testdata/pod-with-custom-floder/kustomization.yaml
new file mode 100644
index 000000000..c43cb220d
--- /dev/null
+++ b/test/testdata/pod-with-custom-floder/kustomization.yaml
@@ -0,0 +1,10 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+resources:
+- ../../../deploy
+- ../../../examples/pvc-with-custom-folder
+commonLabels:
+  app: custom-folder-provisioner
+images:
+- name: rancher/local-path-provisioner
+  newTag: dev