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I have a level4 kaldos drive but the A.I is keeping the level3 gerax drive for the auto designed ships.If you click auto upgrade design it adds kaldos but not without doing that.

What race? (it could be relevant)

It is happening with both mort and humans.It is keeping lower level hyperdrives.

The A.I auto design finally updated to kaldos drive when it reached level5 in the tree.It skipped level4 which means its a bug.

By level 4 I'm going to assume you meant the first rank of the Kaldos tech.

Example

......................................................................../ [kaldos level 1] - [kaldos level 2]
[warp bubble] - [gerax level 1] - [gerax level 2] - [gerax level 3]


In the tech screen the final Gerax and the first Kaldos are in the same tier. What I've noticed happening is that the game weighs the 2 techs in that tier differently. Because the Gerax is a level 3 at tier 4 vs. the Kaldos being level 1 the game says that 4.3 > 4.1 and designs based on that. But when you research the tier 5 Kaldos drive the game adjusts the formula to 5.2 > 4.3 and Kaldos becomes the "better" drive.

These aren't hard numbers just a way to try and simplify what is going on. Sorry if this doesn't help

It was not the final gerax.It was Enhanced hyperdrives level2.