We consider a nonlinearly coupled electromechanical system, and develop a quantitative theory for two-phonon cooling. In the presence of two-phonon cooling, the mechanical Hilbert space is effectively reduced to its ground and first excited states, allowing for quantum operations at the level of individual phonons and preparing nonclassical mechanical states with negative Wigner functions. We propose a scheme for performing arbitrary Bloch sphere rotations, and derive the fidelity in the specific case of a π-pulse. We characterise detrimental processes that reduce the coherence in the system, and demonstrate that our scheme can be implemented in state-of-the-art electromechanical devices.