diff --git a/e2e/webpack/src/webpack.test.ts b/e2e/webpack/src/webpack.test.ts
index 844dc27e6aaf59..6d384c02d42d5d 100644
--- a/e2e/webpack/src/webpack.test.ts
+++ b/e2e/webpack/src/webpack.test.ts
@@ -27,6 +27,8 @@ describe('Webpack Plugin', () => {
     runCLI(`build ${myPkg}`);
     let output = runCommand(`node dist/libs/${myPkg}/main.js`);
     expect(output).toMatch(/Hello/);
+    expect(output).not.toMatch(/Conflicting/);
+    expect(output).not.toMatch(/process.env.NODE_ENV/);
 
     updateProjectConfig(myPkg, (config) => {
       delete config.targets.build;
diff --git a/packages/webpack/src/utils/config.ts b/packages/webpack/src/utils/config.ts
index 94cda0cd45ceb8..b177fbaf609edb 100644
--- a/packages/webpack/src/utils/config.ts
+++ b/packages/webpack/src/utils/config.ts
@@ -189,6 +189,8 @@ export function getBaseWebpackPartial(
         runtimeChunk: true,
       };
     }
+    webpackConfig.optimization ??= {};
+    webpackConfig.optimization.nodeEnv = process.env.NODE_ENV ?? mode;
   }
 
   const extraPlugins: WebpackPluginInstance[] = [];
diff --git a/packages/webpack/src/utils/webpack/partials/common.ts b/packages/webpack/src/utils/webpack/partials/common.ts
index f4068040c98243..22578e29dad9ae 100644
--- a/packages/webpack/src/utils/webpack/partials/common.ts
+++ b/packages/webpack/src/utils/webpack/partials/common.ts
@@ -193,8 +193,6 @@ export function getCommonConfig(
   } catch {}
 
   return {
-    mode:
-      scriptsOptimization || stylesOptimization ? 'production' : 'development',
     profile: buildOptions.statsJson,
     resolve: {
       extensions: ['.ts', '.tsx', '.mjs', '.js'],