XPS in walkout basement
Hi, I am planning to finish my walkout basement. As you can see in the first photo below, the basement wall is 1/2 poured concrete with some type of sprayed on coating (I am the second owner so I am not sure what that is) and then upper half is a normal framed wall with bat insulation. The second photo is showing a close up of where the bottom of the framed wall meets the concrete. As you can see there is a bit of a lip there (it is not uniform around the house, in some areas it is set back 1/2" rather than overhanging). My original plan was to put up 2" XPS and then a 1x3 grid and then drywall. However I haven't seen a lot of examples of covering a framed wall with bat with XPS here, coupled with the fact that there would be gaps between the XPS and either the framed portion of the wall or the concrete due to the overhang in the second photo, I thought I would ask for some opinions on how best to insulate.
Thank you in advance for any replies.