diff --git a/pkg/v1/providers/vendir.lock.yml b/pkg/v1/providers/vendir.lock.yml
index c38ff28a03..90f0d9add5 100644
--- a/pkg/v1/providers/vendir.lock.yml
+++ b/pkg/v1/providers/vendir.lock.yml
@@ -2,10 +2,11 @@ apiVersion: vendir.k14s.io/v1alpha1
 directories:
 - contents:
   - git:
-      commitTitle: fix cpi daemonset overlay for v1.22.3 (#2500)
-      sha: ef137b14f5c3825592aa9d08c3228d0a93169460
+      commitTitle: 'patch priorityClassName: system-node-critical in CPI  daemonset
+        (#2524)'
+      sha: 9e70164c014c23bc47848a576cde10621bab4677
       tags:
-      - v0.10.0-dev.1-206-gef137b14
+      - v0.10.0-dev.1-213-g9e70164c
     path: .
   path: ytt/vendir/vsphere_cpi/_ytt_lib
 - contents:
diff --git a/pkg/v1/providers/vendir.yml b/pkg/v1/providers/vendir.yml
index df58c5b4c8..8899858082 100644
--- a/pkg/v1/providers/vendir.yml
+++ b/pkg/v1/providers/vendir.yml
@@ -6,7 +6,7 @@ directories:
   - path: .
     git:
       url: git@github.com:vmware-tanzu/tce.git
-      ref: ef137b14f5c3825592aa9d08c3228d0a93169460
+      ref: 9e70164c014c23bc47848a576cde10621bab4677
     includePaths:
     - addons/packages/vsphere-cpi/1.22.3/bundle/config/**/*
 - path: ytt/vendir/cni/_ytt_lib
diff --git a/pkg/v1/providers/ytt/vendir/vsphere_cpi/_ytt_lib/addons/packages/vsphere-cpi/1.22.3/bundle/config/upstream/vsphere-cpi/05-daemonset.yaml b/pkg/v1/providers/ytt/vendir/vsphere_cpi/_ytt_lib/addons/packages/vsphere-cpi/1.22.3/bundle/config/upstream/vsphere-cpi/05-daemonset.yaml
index fd454eeb1b..a551c802d6 100644
--- a/pkg/v1/providers/ytt/vendir/vsphere_cpi/_ytt_lib/addons/packages/vsphere-cpi/1.22.3/bundle/config/upstream/vsphere-cpi/05-daemonset.yaml
+++ b/pkg/v1/providers/ytt/vendir/vsphere_cpi/_ytt_lib/addons/packages/vsphere-cpi/1.22.3/bundle/config/upstream/vsphere-cpi/05-daemonset.yaml
@@ -14,6 +14,7 @@ spec:
       labels:
         k8s-app: vsphere-cloud-controller-manager
     spec:
+      priorityClassName: system-node-critical
       containers:
         - args:
             - --v=2