USART transmission errors with CP210x
As far as I understand this problem occurs due to the overflow of CP210 TX buffer. Is my assumption correct?


We don't have enough details to answer this - but it sounds highly likely.


  And if so, what can be done to prevent this?


The CP210x provides the RS232 handshake signals, e.g. RTS/CTS - but that would require a buffer for the UART data on the ATmega.

Try using a big buffer on the PC side: USB transfers work without much CPU interventions in most cases. Note that you cannot elimitnate the data loss when the PC load is too high, you can only try to migitate it with some sort of protocol.