Jest transform svg with vue-jest@4

jest.config.js

modules.export = {
  ...,
  transform: {
    ".*\\.(svg)$": "<rootDir>/svg-transform.js",
  },
}

package.json

{
  "@vue/component-compiler-utils": "^3.2.0",
  "vue-template-compiler": "^2.6.14",
  ...
}

svg-transform.js

const compilerUtils = require("@vue/component-compiler-utils");
const VueTemplateCompiler = require("vue-template-compiler");

/*
 * Manually compile SVG to Vue component so jest can render imported SVG in the same way as it is rendered in live app.
 * https://github.com/vuejs/component-compiler-utils#handling-the-output
 */
module.exports = {
  process(source) {
    const compiledTemplate = compilerUtils.compileTemplate({
      source,
      compiler: VueTemplateCompiler,
      isFunctional: false,
    });

    return `${compiledTemplate.code}
    module.exports = { render: render }`;
  },
};