We study the interplay between electron-electron interaction and a Jahn-Teller phonon coupling in a two -orbital Hubbard model. We demonstrate that the e-ph interaction coexists with the Mott localization driven by the Hubbard repulsion U, but it competes with the Hund's coupling J. This interplay leads to two spectacularly different Mott insulators, a standard high-spin Mott insulator with frozen phonons which is stable when the Hund's coupling prevails, and a low-spin Mott-bipolaronic insulator favored by phonons, where the characteristic features of Mott insulators and bipolarons coexist. The two phases are separated by a sharp boundary along which an intriguing intermediate solution emerges as a kind of compromise between the two solutions.
