General Motors Co. said Tuesday it will invest more than $850 million to upgrade five North American factories to make its next-generation V8 engines more fuel efficient.

The new V8s will differ from the current versions by using direct injection and a new combustion system, spokeswoman Sharon Basel said. The next-generation engines will also be lighter. GM will build them exclusively from aluminum, compared with the current versions' aluminum and iron makeup, Basel said. All of the engines will be able to run on E85 ethanol.

To build the engines, GM will renovate or retool powertrain factories in Tonawanda, N.Y.; Bay City, Mich.; Bedford, Ind.; Defiance, Ohio; and St. Catharines, Ontario.

GM uses its current V-8 family of engines in full-sized pickups, SUVs, vans and some performance cars, Basel said.

“There is no doubt that a major differentiator going forward will be powertrain technology,” said Michael Robinet, vice president at research firm CSM Worldwide in Northville, Mich. “Heavy investment and improved fuel economy will be on every company's agenda.”