diff --git a/test/testdata/generate.sh b/test/testdata/generate.sh
index 814c5723931..b87539e827d 100755
--- a/test/testdata/generate.sh
+++ b/test/testdata/generate.sh
@@ -130,12 +130,12 @@ build_kb
 scaffold_test_project project-v2 --project-version=2
 
 # [Currently, default CLI plugin] - Project version 3 (default) uses plugin go/v3 (default).
-scaffold_test_project project-v3
-scaffold_test_project project-v3-multigroup
+scaffold_test_project project-v3 --plugins="go/v3"
+scaffold_test_project project-v3-multigroup --plugins="go/v3"
 scaffold_test_project project-v3-declarative-v1 --plugins="go/v3,declarative"
-scaffold_test_project project-v3-config --component-config
-scaffold_test_project project-v3-with-deploy-image
-scaffold_test_project project-v3-with-grafana
+scaffold_test_project project-v3-config --component-config --plugins="go/v3"
+scaffold_test_project project-v3-with-deploy-image --plugins="go/v3"
+scaffold_test_project project-v3-with-grafana --plugins="go/v3"
 
 # [Next version, alpha] Project version v4-alpha
 scaffold_test_project project-v4 --plugins="go/v4"
@@ -143,4 +143,4 @@ scaffold_test_project project-v4-multigroup --plugins="go/v4"
 scaffold_test_project project-v4-declarative-v1 --plugins="go/v4,declarative"
 scaffold_test_project project-v4-config --component-config --plugins="go/v4"
 scaffold_test_project project-v4-with-deploy-image --plugins="go/v4"
-scaffold_test_project project-v4-with-grafana
+scaffold_test_project project-v4-with-grafana --plugins="go/v4"
diff --git a/testdata/project-v4-with-grafana/Dockerfile b/testdata/project-v4-with-grafana/Dockerfile
index 8f9cca18eb6..ef4cfaf90bd 100644
--- a/testdata/project-v4-with-grafana/Dockerfile
+++ b/testdata/project-v4-with-grafana/Dockerfile
@@ -12,16 +12,16 @@ COPY go.sum go.sum
 RUN go mod download
 
 # Copy the go source
-COPY main.go main.go
+COPY cmd/main.go cmd/main.go
 COPY api/ api/
-COPY controllers/ controllers/
+COPY internal/controller/ internal/controller/
 
 # Build
 # the GOARCH has not a default value to allow the binary be built according to the host where the command
 # was called. For example, if we call make docker-build in a local env which has the Apple Silicon M1 SO
 # the docker BUILDPLATFORM arg will be linux/arm64 when for Apple x86 it will be linux/amd64. Therefore,
 # by leaving it empty we can ensure that the container and binary shipped on it will have the same platform.
-RUN CGO_ENABLED=0 GOOS=${TARGETOS:-linux} GOARCH=${TARGETARCH} go build -a -o manager main.go
+RUN CGO_ENABLED=0 GOOS=${TARGETOS:-linux} GOARCH=${TARGETARCH} go build -a -o manager cmd/main.go
 
 # Use distroless as minimal base image to package the manager binary
 # Refer to https://github.com/GoogleContainerTools/distroless for more details
diff --git a/testdata/project-v4-with-grafana/Makefile b/testdata/project-v4-with-grafana/Makefile
index 73a01c158dd..87dd37d4e2f 100644
--- a/testdata/project-v4-with-grafana/Makefile
+++ b/testdata/project-v4-with-grafana/Makefile
@@ -62,11 +62,11 @@ test: manifests generate fmt vet envtest ## Run tests.
 
 .PHONY: build
 build: manifests generate fmt vet ## Build manager binary.
-	go build -o bin/manager main.go
+	go build -o bin/manager cmd/main.go
 
 .PHONY: run
 run: manifests generate fmt vet ## Run a controller from your host.
-	go run ./main.go
+	go run ./cmd/main.go
 
 # If you wish built the manager image targeting other platforms you can use the --platform flag.
 # (i.e. docker build --platform linux/arm64 ). However, you must enable docker buildKit for it.
@@ -132,7 +132,7 @@ CONTROLLER_GEN ?= $(LOCALBIN)/controller-gen
 ENVTEST ?= $(LOCALBIN)/setup-envtest
 
 ## Tool Versions
-KUSTOMIZE_VERSION ?= v3.8.7
+KUSTOMIZE_VERSION ?= v5.0.0
 CONTROLLER_TOOLS_VERSION ?= v0.11.3
 
 KUSTOMIZE_INSTALL_SCRIPT ?= "https://raw.githubusercontent.com/kubernetes-sigs/kustomize/master/hack/install_kustomize.sh"
diff --git a/testdata/project-v4-with-grafana/PROJECT b/testdata/project-v4-with-grafana/PROJECT
index 241a6cdefb9..35d0977d50f 100644
--- a/testdata/project-v4-with-grafana/PROJECT
+++ b/testdata/project-v4-with-grafana/PROJECT
@@ -4,7 +4,7 @@
 # More info: https://book.kubebuilder.io/reference/project-config.html
 domain: testproject.org
 layout:
-- go.kubebuilder.io/v3
+- go.kubebuilder.io/v4
 plugins:
   grafana.kubebuilder.io/v1-alpha: {}
 projectName: project-v4-with-grafana
diff --git a/testdata/project-v4-with-grafana/main.go b/testdata/project-v4-with-grafana/cmd/main.go
similarity index 100%
rename from testdata/project-v4-with-grafana/main.go
rename to testdata/project-v4-with-grafana/cmd/main.go
diff --git a/testdata/project-v4-with-grafana/config/default/kustomization.yaml b/testdata/project-v4-with-grafana/config/default/kustomization.yaml
index ca19fadabb7..d392dadc0fd 100644
--- a/testdata/project-v4-with-grafana/config/default/kustomization.yaml
+++ b/testdata/project-v4-with-grafana/config/default/kustomization.yaml
@@ -9,10 +9,12 @@ namespace: project-v4-with-grafana-system
 namePrefix: project-v4-with-grafana-
 
 # Labels to add to all resources and selectors.
-#commonLabels:
-#  someName: someValue
+#labels:
+#- includeSelectors: true
+#  pairs:
+#    someName: someValue
 
-bases:
+resources:
 - ../crd
 - ../rbac
 - ../manager
@@ -41,32 +43,102 @@ patchesStrategicMerge:
 # 'CERTMANAGER' needs to be enabled to use ca injection
 #- webhookcainjection_patch.yaml
 
-# the following config is for teaching kustomize how to do var substitution
-vars:
 # [CERTMANAGER] To enable cert-manager, uncomment all sections with 'CERTMANAGER' prefix.
-#- name: CERTIFICATE_NAMESPACE # namespace of the certificate CR
-#  objref:
-#    kind: Certificate
-#    group: cert-manager.io
-#    version: v1
-#    name: serving-cert # this name should match the one in certificate.yaml
-#  fieldref:
-#    fieldpath: metadata.namespace
-#- name: CERTIFICATE_NAME
-#  objref:
-#    kind: Certificate
-#    group: cert-manager.io
-#    version: v1
-#    name: serving-cert # this name should match the one in certificate.yaml
-#- name: SERVICE_NAMESPACE # namespace of the service
-#  objref:
-#    kind: Service
-#    version: v1
-#    name: webhook-service
-#  fieldref:
-#    fieldpath: metadata.namespace
-#- name: SERVICE_NAME
-#  objref:
-#    kind: Service
-#    version: v1
-#    name: webhook-service
+# Uncomment the following replacements to add the cert-manager CA injection annotations
+#replacements:
+#  - source: # Add cert-manager annotation to ValidatingWebhookConfiguration, MutatingWebhookConfiguration and CRDs
+#      kind: Certificate
+#      group: cert-manager.io
+#      version: v1
+#      name: serving-cert # this name should match the one in certificate.yaml
+#      fieldPath: .metadata.namespace # namespace of the certificate CR
+#    targets:
+#      - select:
+#          kind: ValidatingWebhookConfiguration
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 0
+#          create: true
+#      - select:
+#          kind: MutatingWebhookConfiguration
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 0
+#          create: true
+#      - select:
+#          kind: CustomResourceDefinition
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 0
+#          create: true
+#  - source:
+#      kind: Certificate
+#      group: cert-manager.io
+#      version: v1
+#      name: serving-cert # this name should match the one in certificate.yaml
+#      fieldPath: .metadata.name
+#    targets:
+#      - select:
+#          kind: ValidatingWebhookConfiguration
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 1
+#          create: true
+#      - select:
+#          kind: MutatingWebhookConfiguration
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 1
+#          create: true
+#      - select:
+#          kind: CustomResourceDefinition
+#        fieldPaths:
+#          - .metadata.annotations.[cert-manager.io/inject-ca-from]
+#        options:
+#          delimiter: '/'
+#          index: 1
+#          create: true
+#  - source: # Add cert-manager annotation to the webhook Service
+#      kind: Service
+#      version: v1
+#      name: webhook-service
+#      fieldPath: .metadata.name # namespace of the service
+#    targets:
+#      - select:
+#          kind: Certificate
+#          group: cert-manager.io
+#          version: v1
+#        fieldPaths:
+#          - .spec.dnsNames.0
+#          - .spec.dnsNames.1
+#        options:
+#          delimiter: '.'
+#          index: 0
+#          create: true
+#  - source:
+#      kind: Service
+#      version: v1
+#      name: webhook-service
+#      fieldPath: .metadata.namespace # namespace of the service
+#    targets:
+#      - select:
+#          kind: Certificate
+#          group: cert-manager.io
+#          version: v1
+#        fieldPaths:
+#          - .spec.dnsNames.0
+#          - .spec.dnsNames.1
+#        options:
+#          delimiter: '.'
+#          index: 1
+#          create: true
diff --git a/testdata/project-v4-with-grafana/config/rbac/service_account.yaml b/testdata/project-v4-with-grafana/config/rbac/service_account.yaml
index 1fb853ae687..04f10b75d76 100644
--- a/testdata/project-v4-with-grafana/config/rbac/service_account.yaml
+++ b/testdata/project-v4-with-grafana/config/rbac/service_account.yaml
@@ -3,7 +3,7 @@ kind: ServiceAccount
 metadata:
   labels:
     app.kubernetes.io/name: serviceaccount
-    app.kubernetes.io/instance: controller-manager
+    app.kubernetes.io/instance: controller-manager-sa
     app.kubernetes.io/component: rbac
     app.kubernetes.io/created-by: project-v4-with-grafana
     app.kubernetes.io/part-of: project-v4-with-grafana