diff --git a/sky/backends/wheel_utils.py b/sky/backends/wheel_utils.py
index 254094ad81a..44d47b52926 100644
--- a/sky/backends/wheel_utils.py
+++ b/sky/backends/wheel_utils.py
@@ -39,29 +39,30 @@
                   f'{version.parse(sky.__version__)}-*.whl')
 
 
-def _get_latest_wheel_and_remove_all_others() -> pathlib.Path:
-    wheel_name = (f'**/{_WHEEL_PATTERN}')
+def _remove_stale_wheels(latest_wheel_dir: pathlib.Path) -> None:
+    """Remove all wheels except the latest one."""
+    for f in WHEEL_DIR.iterdir():
+        if f != latest_wheel_dir:
+            if f.is_dir() and not f.is_symlink():
+                shutil.rmtree(f, ignore_errors=True)
+
+
+def _get_latest_wheel() -> pathlib.Path:
+    wheel_name = f'**/{_WHEEL_PATTERN}'
     try:
         latest_wheel = max(WHEEL_DIR.glob(wheel_name), key=os.path.getctime)
     except ValueError:
         raise FileNotFoundError(
             'Could not find built SkyPilot wheels with glob pattern '
             f'{wheel_name} under {WHEEL_DIR!r}') from None
-
-    latest_wheel_dir_name = latest_wheel.parent
-    # Cleanup older wheels.
-    for f in WHEEL_DIR.iterdir():
-        if f != latest_wheel_dir_name:
-            if f.is_dir() and not f.is_symlink():
-                shutil.rmtree(f, ignore_errors=True)
     return latest_wheel
 
 
-def _build_sky_wheel():
-    """Build a wheel for SkyPilot."""
-    with tempfile.TemporaryDirectory() as tmp_dir:
+def _build_sky_wheel() -> pathlib.Path:
+    """Build a wheel for SkyPilot and return the path to the wheel."""
+    with tempfile.TemporaryDirectory() as tmp_dir_str:
         # prepare files
-        tmp_dir = pathlib.Path(tmp_dir)
+        tmp_dir = pathlib.Path(tmp_dir_str)
         sky_tmp_dir = tmp_dir / 'sky'
         sky_tmp_dir.mkdir()
         for item in SKY_PACKAGE_PATH.iterdir():
@@ -129,6 +130,7 @@ def _build_sky_wheel():
         wheel_dir = WHEEL_DIR / hash_of_latest_wheel
         wheel_dir.mkdir(parents=True, exist_ok=True)
         shutil.move(str(wheel_path), wheel_dir)
+        return wheel_dir / wheel_path.name
 
 
 def build_sky_wheel() -> Tuple[pathlib.Path, str]:
@@ -161,13 +163,22 @@ def _get_latest_modification_time(path: pathlib.Path) -> float:
         last_modification_time = _get_latest_modification_time(SKY_PACKAGE_PATH)
         last_wheel_modification_time = _get_latest_modification_time(WHEEL_DIR)
 
-        # only build wheels if the wheel is outdated
-        if last_wheel_modification_time < last_modification_time:
+        # Only build wheels if the wheel is outdated or wheel does not exist
+        # for the requested version.
+        if (last_wheel_modification_time < last_modification_time) or not any(
+                WHEEL_DIR.glob(f'**/{_WHEEL_PATTERN}')):
             if not WHEEL_DIR.exists():
                 WHEEL_DIR.mkdir(parents=True, exist_ok=True)
-            _build_sky_wheel()
-
-        latest_wheel = _get_latest_wheel_and_remove_all_others()
+            latest_wheel = _build_sky_wheel()
+        else:
+            latest_wheel = _get_latest_wheel()
+
+        # We remove all wheels except the latest one for garbage collection.
+        # Otherwise stale wheels will accumulate over time.
+        # TODO(romilb): If the user switches versions every alternate launch,
+        #  the wheel will be rebuilt every time. At the risk of adding
+        #  complexity, we can consider TTL caching wheels by version here.
+        _remove_stale_wheels(latest_wheel.parent)
 
         wheel_hash = latest_wheel.parent.name