You could mirror the progression in Vanilla by tying the production ratio to the quality of the upcycler.

E.g:
Normal Quality Upcycler produces at the same rate as 4 Tier 1 Quality modules.
Uncommon Quality Upcycler produces at the same rate as 4 Rare Tier 1 Quality modules.
Rare Quality Upcycler produces at the same rate as 4 Tier 2 Quality modules.
Epic Quality Upcycler produces at the same rate as 4 Tier 3 Quality modules.
Legendary Quality Upcycles produces at the same rate as 4 Legendary Tier 3 Quality modules.

Could maybe split into MK1, MK2 and MK3 Upcyclers too, for finer granularity. And adjust cost so Upcyclers cost roughly the same as 4 Quality Modules+Assembler.

introducing tiers is on my mind, im currently gathering concepts on how to do the next tier of mods

I second this idea. I'd suggest to re-enable the quality modules not as modules but as intermediate products and have the higher tier require the appropriate amount of modules to produce. Easy and intuitive way to balance Upcycler vs. modules.

interesting idea, could you elaborate more on how that would work?