Is it possible to use Time Machine with iCloud?
Unfortunately, Time Machine doesn't support this feature and there are a couple of reasons why.


Time Machine makes physical backups of all your files, not just links to them. If it backed up to iCloud Drive (which syncs to your Mac), it would duplicate 150GB on to your HDD. It would then try to back all of that up too (unless you exclude that location from the backup) so it would try to add another 150GB to the backup, and so on.
Time Machine makes incremental backups. Sure, your backup is just 150GB now. But you change a few files and it backs up an additional 25MB. You install a new app and it adds another 2GB. While you may keep your actual drive below 320GB, your Time Machine backup could end up over 1TB in size! In my case, I use about 400GB of storage on my Mac, but my Time Machine backup is over 1.3TB due to deleted files.


Having said all that, sure, theoretically it is possible. If you created a link to a folder on your iCloud Drive in /Volumes/ it should show up as a disk to back up to, and if you excluded backing up iCloud Drive through Time Machine it wouldn't double in size every backup. Your hard drive would fill up very very quickly though, and your performance would suffer. To me, at least, this seems a lot more effort than it is worth.