diff --git a/tests/conftest.py b/tests/conftest.py
index 98827e1dfc7f8fb11c219940d3b2332dd7848e1b..262386851ce159ad7f60d92b6d07e4cd7e86cc5d 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -14,7 +14,12 @@ def wrapper(tmpdir, request):
     Note that a number of necessary variables are expected to be present in the environment
     """
     wrapper_dir = Path(tmpdir / "wrapper")
-    test_dir = wrapper_dir / TEST_MODULE_NAME
+    TEST_MODULE_PATH = (
+        TEST_MODULE_NAME
+        if "E3_MODULE_SRC_PATH" not in request.param
+        else request.param["E3_MODULE_SRC_PATH"]
+    )
+    test_dir = wrapper_dir / TEST_MODULE_PATH
     test_dir.mkdir(parents=True)
 
     config_file = """
@@ -43,6 +48,7 @@ HEADERS += {headers}
     make_vars.update(**request.param)
     with open(wrapper_dir / f"{TEST_MODULE_NAME}.Makefile", "w") as f:
         f.write(module_makefile.format(**make_vars))
-    with open(wrapper_dir / TEST_MODULE_NAME / "test.dbd", "w") as f:
+
+    with open(wrapper_dir / TEST_MODULE_PATH / "test.dbd", "w") as f:
         pass
     yield wrapper_dir
diff --git a/tests/test_e3.py b/tests/test_e3.py
new file mode 100644
index 0000000000000000000000000000000000000000..da8b82687fe06c704b786ebc26e90529b9a38cc8
--- /dev/null
+++ b/tests/test_e3.py
@@ -0,0 +1,16 @@
+import pytest
+
+from .utils import run_make
+
+
+@pytest.mark.parametrize(
+    "wrapper",
+    [{"E3_MODULE_SRC_PATH": "test-loc"}],
+    indirect=True,
+)
+def test_loc(wrapper):
+    rc, _, errs = run_make(wrapper, "build", E3_MODULE_SRC_PATH="test-loc")
+    assert rc == 2
+    assert 'DEPRECATED: Local source mode "-loc" has being deprecated' in errs.decode(
+        "utf-8"
+    )