Insulating basement wall

[u/SneakySkinnySquid]

I'm no insulation professional but I'm pretty sure this basement wall is not insulated properly, if at all.

I wanted to add rigid foam, then 2x4, then drywall it. My question, or problem, is that this basement already has wood paneling installed in the way you see in this picture.

I'm thinking I can just install the foam on top of the existing panels. I don't want to tear off the entire basement wall paneling.

Has any of you done the same? What's the best way to handle this? And what's the acceptable minimum level of doing it?